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EXHIBIT 10.16
LOAN AGREEMENT
($35,000,000 U.S. REVOLVING LOAN FACILITY,
$10,000,000 CANADIAN REVOLVING LOAN FACILITY,
$5,000,000 U.K. REVOLVING LOAN FACILITY
AND
$50,000,000 TERM LOAN FACILITY)
DATED AS OF MARCH 16, 2001
AMONG
NATCO GROUP INC.,
AS U.S. BORROWER,
NATCO CANADA, LTD.,
AS CANADIAN BORROWER,
AXSIA GROUP LIMITED,
AS U.K. BORROWER,
THE CHASE MANHATTAN BANK,
AS U.S. AGENT AND AS A U.S. LENDER,
ROYAL BANK OF CANADA,
AS CANADIAN AGENT AND AS A CANADIAN LENDER,
CHASE MANHATTAN INTERNATIONAL LIMITED,
AS U.K. AGENT AND AS A U.K. LENDER,
BANK ONE, NA (MAIN OFFICE CHICAGO ILLINOIS),
AS SYNDICATIONS AGENT,
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT,
XX XXXXXX, A DIVISION OF CHASE SECURITIES INC.,
AS SOLE BOOKRUNNER AND LEAD ARRANGER
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
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TABLE OF CONTENTS
Page
1. Definitions...............................................................1
1.1 Certain Defined Terms..............................................1
1.2 Miscellaneous.....................................................30
2. Commitments; Loans; BA's and Letters of Credit...........................30
2.1 Loans and BA's....................................................30
2.2 Letters of Credit.................................................32
2.3 Certain Provisions Relating to Bankers' Acceptances...............37
2.4 Terminations, Reductions or Reallocations of Commitments.........39
2.5 Commitment Fees...................................................41
2.6 Several Obligations...............................................42
2.7 Notes.............................................................42
2.8 Use of Proceeds...................................................43
2.9 Currency Fluctuations.............................................43
3. Borrowings, Prepayments and Interest Options.............................44
3.1 Borrowings........................................................44
3.2 Prepayments.......................................................44
3.3 Interest Options..................................................47
4. Payments; Pro Rata Treatment; Computations, Etc..........................52
4.1 Payments..........................................................52
4.2 Pro Rata Treatment................................................53
4.3 Certain Actions, Notices, Etc.....................................54
4.4 Non-Receipt of Funds by Any Agent.................................55
4.5 Sharing of Payments, Etc..........................................56
5. Conditions Precedent.....................................................56
5.1 Initial Loans, Letters of Credit and Bankers' Acceptances.........56
5.2 All Loans, Letters of Credit and Bankers' Acceptances.............58
6. Representations and Warranties...........................................59
6.1 Organization......................................................59
6.2 Financial Statements..............................................59
6.3 Enforceable Obligations; Authorization............................60
6.4 Other Debt........................................................60
6.5 Litigation........................................................60
6.6 Title.............................................................60
6.7 Taxes.............................................................60
6.8 Regulations U and X...............................................60
6.9 Subsidiaries......................................................60
6.10 No Untrue or Misleading Statements................................61
6.11 ERISA.............................................................61
6.12 Investment Company Act............................................61
6.13 Public Utility Holding Company Act................................61
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6.14 Solvency..........................................................61
6.15 Fiscal Year.......................................................61
6.16 Compliance........................................................61
6.17 Environmental Matters.............................................61
6.18 Collateral Covered................................................62
6.19 Property of Excluded Subsidiaries and Certain
Foreign Subsidiaries...........................................62
7. Affirmative Covenants....................................................62
7.1 Taxes, Existence, Regulations, Property, Etc......................62
7.2 Financial Statements and Information..............................63
7.3 Financial Tests...................................................64
7.4 Inspection........................................................64
7.5 Further Assurances................................................64
7.6 Books and Records.................................................65
7.7 Insurance.........................................................65
7.8 Notice of Certain Matters.........................................65
7.9 Capital Adequacy..................................................65
7.10 ERISA Information and Compliance..................................66
7.11 Additional Security Documents.....................................67
8. Negative Covenants.......................................................67
8.1 Borrowed Money Indebtedness.......................................67
8.2 Liens.............................................................68
8.3 Contingent Liabilities............................................68
8.4 Mergers, Consolidations and Dispositions of Assets................68
8.5 Redemption, Dividends and Distributions...........................69
8.6 Nature of Business................................................69
8.7 Transactions with Related Parties.................................70
8.8 Loans and Investments.............................................70
8.9 Subsidiaries......................................................70
8.10 Key Agreements....................................................71
8.11 Organizational Documents..........................................71
8.12 Unfunded Liabilities..............................................71
8.13 Operating Lease Expenses..........................................71
8.14 Sale/Leasebacks...................................................71
8.15 Acquisitions......................................................71
8.16 Negative Pledges..................................................71
8.17 Synthetic Repurchases of Equity or Debt...........................71
8.18 Property of Excluded Subsidiaries and Certain
Foreign Subsidiaries...........................................72
9. Defaults.................................................................72
9.1 Events of Default.................................................72
9.2 Right of Setoff...................................................75
9.3 Collateral Account................................................75
9.4 Preservation of Security for Letter of Credit Liabilities.........76
9.5 Currency Conversion After Maturity................................76
9.6 Remedies Cumulative...............................................76
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10. Agents...................................................................77
10.1 Appointment, Powers and Immunities................................77
10.2 Reliance..........................................................78
10.3 Defaults..........................................................78
10.4 Material Written Notices..........................................79
10.5 Rights as a Lender................................................79
10.6 Indemnification...................................................79
10.7 Non-Reliance on Agents and Other Lenders..........................79
10.8 Failure to Act....................................................80
10.9 Resignation or Removal of Agent...................................80
10.10 No Partnership....................................................81
10.11 Authority of Agent................................................81
10.12 Syndications Agent; Documentation Agent...........................81
11. Miscellaneous............................................................81
11.1 Waiver............................................................81
11.2 Notices...........................................................82
11.3 Expenses, Etc.....................................................82
11.4 Indemnification...................................................83
11.5 Amendments, Etc...................................................83
11.6 Successors and Assigns............................................84
11.7 Limitation of Interest............................................87
11.8 Survival..........................................................87
11.9 Captions..........................................................88
11.10 Counterparts......................................................88
11.11 Governing Law.....................................................88
11.12 Severability......................................................88
11.13 Tax Forms; Net Payments...........................................88
11.14 Interest Act (Canada).............................................89
11.15 Judgment Currency.................................................89
11.16 Conflicts Between This Agreement and the Other Loan Documents.....90
11.17 Limitation on Charges; Substitute Lenders; Non-Discrimination.....90
11.18 WAIVER OF JURY TRIAL..............................................90
11.19 Confidentiality...................................................91
11.20 Amendment and Restatement.........................................91
EXHIBITS
A-1 -- Request for Extension of Credit (U.S. Borrower)
A-2 -- Request for Extension of Credit (Canadian Borrower)
A-3 -- Request for Extension of Credit (U.K. Borrower)
B -- Rate Designation Notice
C -- Canadian Revolving Note
D -- U.S. Revolving Note
E -- Assignment and Acceptance
F -- Compliance Certificate
G -- Bankers' Acceptance Notice
H -- Canadian Dollar Revolving Note
I -- Borrowing Base Certificate
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J -- Term Note
K --Subsidiaries
L -- U.K. Revolving Note
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of March 16, 2001 (the
"Effective Date"), by and among NATCO GROUP INC., a Delaware corporation (the
"U.S. Borrower"); NATCO CANADA, LTD., a corporation formed under the laws of the
Province of Ontario (the "Canadian Borrower"); AXSIA GROUP LIMITED, a company
incorporated in England and Wales under the Companies Act of the United Kingdom
(the "U.K. Borrower"); each of the lenders which is or may from time to time
become a party hereto (individually, a "Lender" and, collectively, the
"Lenders", which terms shall include U.S. Lenders, Canadian Lenders and U.K.
Lenders); THE CHASE MANHATTAN BANK ("Chase"), a New York banking corporation, as
agent for the U.S. Lenders (in such capacity, together with its successors in
such capacity, the "U.S. Agent"); ROYAL BANK OF CANADA ("RBC"), as agent for the
Canadian Lenders (in such capacity, together with its successors in such
capacity, the "Canadian Agent"); CHASE MANHATTAN INTERNATIONAL LIMITED ("Chase
U.K."), as agent for the U.K. Lenders (in such capacity, together with its
successors in such capacity, the "U.K. Agent"); BANK ONE, NA (MAIN OFFICE
CHICAGO ILLINOIS), as Syndications Agent; XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION, as Documentation Agent, and XX XXXXXX, A DIVISION OF CHASE
SECURITIES, as Sole Bookrunner and Lead Arranger.
The parties hereto agree as follows:
1. Definitions.
1.1 Certain Defined Terms.
In this Agreement, terms defined above shall have the meanings ascribed
to them above. Unless a particular term, word or phrase is otherwise defined or
the context otherwise requires, capitalized terms, words and phrases used herein
or in the Loan Documents (as hereinafter defined) have the following meanings
(all definitions that are defined in this Agreement or in the Loan Documents in
the singular have the same meanings when used in the plural and vice versa):
Acceptance Fee means the fee payable in Canadian Dollars to each
Canadian Lender in respect of the Bankers' Acceptances accepted by such Canadian
Lender computed in accordance with Section 2.3(c).
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in the Uniform Commercial Code enacted in
the State of Texas as Sections 1 through 11 of the Texas Business and Commerce
Code, in force on the Effective Date.
Additional Collateral shall have the meaning ascribed to such term in
Section 7.8 hereof.
Additional Collateral Event shall have the meaning ascribed to such
term in Section 7.8 hereof.
Additional Interest means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than interest on
the Notes at the Stated Rate and any
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Acceptance Fee) which, under applicable laws, are or may be deemed to constitute
interest on the indebtedness evidenced by the Notes or any other amounts owing
under any Loan Document.
Adjusted LIBOR means, with respect to each Interest Period applicable
to a LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with respect to such Interest Period divided by (b)
1.0000 minus the Eurodollar Reserve Requirement in effect on the first day of
such Interest Period.
Affiliate means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
Agents means U.S. Agent, Canadian Agent and U.K. Agent, collectively.
Agreement means this Loan Agreement, as it may from time to time be
amended, modified, restated or supplemented.
Amounts Recoverable on Contracts means revenues in excess of xxxxxxxx
on open contracts, as determined in accordance with GAAP.
Annual Financial Statements means the annual financial statements of a
Person, including all notes thereto, which statements shall include a balance
sheet as of the end of the fiscal year relating thereto and an income statement
and a statement of cash flows for such fiscal year, all setting forth in
comparative form the corresponding figures from the previous fiscal year, all
prepared in conformity with GAAP in all material respects, and accompanied by
the opinion of independent certified public accountants of recognized national
standing, which shall state that such financial statements present fairly in all
material respects the financial position of such Person and, if such Person has
any Subsidiaries, its consolidated Subsidiaries as of the date thereof and the
results of its operations for the period covered thereby in conformity with
GAAP. As to U.S. Borrower only, Annual Financial Statements shall also include
unaudited consolidating financial statements for U.S. Borrower and its
Subsidiaries, each in Proper Form, certified by the chief financial officer or
other authorized officer of U.S. Borrower as presenting fairly in all material
respects the consolidating financial position of U.S. Borrower and its
Subsidiaries. With respect to the Annual Financial Statements for U.K. Borrower
for the fiscal year ended December 31, 2000 required by Section 7.2 hereof, the
references to "GAAP" in this definition shall be deemed to mean United Kingdom
generally accepted accounting principles.
Applicable BA Discount Rate means, as applicable to a Bankers'
Acceptance being purchased by any Canadian Lender on any day, the percentage
discount rate (expressed to two decimal places and rounded upward, if necessary,
to the nearest 1/100th of 1%) quoted by the Canadian Agent as that at which the
Canadian Agent would, in accordance with normal practice, at or about 12:00 noon
(Toronto, Ontario time), on such day, be prepared to purchase Bankers'
Acceptances in an amount and having a maturity date comparable to the amount and
maturity date of such Bankers' Acceptances.
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Applicable Canadian Pension Legislation means, at any time, any federal
or provincial pension legislation then applicable to the Canadian Borrower,
including the Employment Pension Plans Act (Alberta), the Pension Benefits Act
(Ontario) and the Income Tax Act (Canada), including all regulations made
thereunder, and all rules, regulations, rulings and interpretations made or
issued by any Governmental Authority having or asserting jurisdiction in respect
thereof.
Applications means all applications and agreements for Letters of
Credit, or similar instruments or agreements, in Proper Form, now or hereafter
executed by any Person in connection with any Letter of Credit now or hereafter
issued or to be issued under the terms hereof at the request of any Person.
Assessment Rate means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the U.S. Agent to be representative of the cost
of such insurance to the applicable Lenders.
Asset Coverage Ratio means, as of any day, the ratio of (a) the sum of
the accounts receivable (net of any reserves), inventory (net of any reserves)
and property, plant and equipment, (net of accumulated depreciation and
amortization), of the U.S. Borrower and its Subsidiaries, on a consolidated
basis, as of such day to (b) Borrowed Money Indebtedness of U.S. Borrower and
its Subsidiaries, on a consolidated basis, as of such day (exclusive of the
categories of Borrowed Money Indebtedness, other than obligations in respect of
bankers' acceptances, described in clauses (vii), (viii) and (ix) of the
definition of "Borrowed Money Indebtedness" set forth in this Section 1.1).
Assignment and Acceptance shall have the meaning ascribed to such term
in Section 11.6(b).
Availability Period means, for each Lender, the period from and
including the Effective Date to (but not including) the Termination Date.
BA Discount Proceeds means in respect of any Bankers' Acceptance being
purchased by a Canadian Lender on any day under Section 2.3, an amount (rounded
to the nearest whole Canadian cent, and with one-half of one Canadian cent being
rounded up) calculated on such day by multiplying:
(A) the face amount of such Bankers' Acceptance; by
(B) the quotient equal to one divided by the sum of one plus the
product of:
(i) the Applicable BA Discount Rate (expressed as a decimal)
applicable to such Bankers' Acceptance; and
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(ii) a fraction, the numerator of which is the number of days
remaining in the term of such Bankers' Acceptance and
the denominator of which is 365;
with such quotient being rounded up or down to the nearest
fifth decimal place and .000005 being rounded up.
Bankers' Acceptance or BA means a xxxx of exchange denominated in
Canadian Dollars drawn by the Canadian Borrower on and accepted by a Canadian
Lender pursuant to Section 2.3 hereof.
Bankers' Acceptance Liabilities means, at any time and in respect of
any Bankers' Acceptance, the face amount thereof if still outstanding and unpaid
or, following maturity and payment thereof, the aggregate unpaid amount of all
Reimbursement Obligations at that time due and payable in respect of the payment
of such Bankers' Acceptance upon maturity.
Bankers' Acceptance Notice has the meaning specified in Section 2.3(a).
Bankruptcy Code means (i) the United States Bankruptcy Code, (ii) the
Bankruptcy and Insolvency Act (Canada) and (iii) the Companies' Creditors
Arrangement Act (Canada), as the same may be amended and together with any
successor statutes.
Base CD Rate means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the CD Reserve Rate plus (b) the Assessment Rate.
Base Rate means, for any day, a rate per annum equal to the lesser of
(a) the then applicable Margin Percentage from time to time in effect plus the
greatest of (1) the applicable Prime Rate for that day, (2) the Base CD Rate for
that day plus 1% and (3) the Federal Funds Rate for that day plus 1/2 of 1% or
(b) the Ceiling Rate. If for any reason any applicable Agent shall have
determined (which determination shall be conclusive and binding, absent manifest
error) that it is unable to ascertain either or both of the Federal Funds Rate
or the Base CD Rate for any reason, including, without limitation, the inability
or failure of Agent to obtain sufficient quotations in accordance with the terms
hereof, the Base Rate shall, until the circumstances giving rise to such
inability no longer exist, be calculated without regard to that particular
component.
Base Rate Borrowing means that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
Borrowed Money Indebtedness means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments evidencing borrowed money, (iii) all obligations of such Person
under conditional sale or other title retention agreements relating to Property
purchased by such Person, (iv) all obligations of such Person issued or assumed
as the deferred purchase price of Property or services (excluding obligations of
such Person to creditors for raw materials, inventory, services and supplies and
deferred payments for services to employees and former employees incurred in the
ordinary course of such Person's business), (v) all lease obligations of such
Person which have been capitalized on the balance sheet of such Person in
accordance with GAAP,
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(vi) all obligations of others secured by any Lien on Property owned or acquired
by such Person, whether or not the obligations secured thereby have been
assumed, equal to the lesser of the amount of such obligation or the fair market
value of such Property, (vii) Interest Rate Risk Indebtedness of such Person,
(viii) all obligations of such Person in respect of outstanding letters of
credit issued for the account of such Person (or for which such Person is
primarily liable) or bankers' acceptances drawn by such Person and (ix) all
guarantees of such Person.
Borrowers means U.S. Borrower, Canadian Borrower and U.K. Borrower,
collectively.
Borrowing Base Certificate shall mean a certificate, duly executed by
the chief executive officer, chief financial officer, treasurer or controller of
Borrowers, appropriately completed and in substantially the form of Exhibit I
hereto. Each Borrowing Base Certificate shall be effective only as accepted by
Agents (and with such revisions, if any, as Agents may reasonably require as a
condition to such acceptance).
Business Day means any day other than a day on which commercial banks
are authorized or required to close in Houston, Texas, Toronto, Ontario or
London, England.
Calculation Date means the last Business Day of each month.
Canadian Borrowing Base means, as at any date, the amount of the
Canadian Borrowing Base shown on the Borrowing Base Certificate then most
recently delivered pursuant to Section 7.2(f) hereof, determined by calculating
the amount equal to:
(i) the sum of (x) 80% of the aggregate amount of all Eligible
Accounts of the Canadian Borrower and its Subsidiaries at said
date which are not progress payments and (y) the lesser of (1)
70% of the aggregate amount of all Eligible Accounts of the
Canadian Borrower and its Subsidiaries at said date which are
progress payments or (2) $2,000,000, plus
(ii) the sum of (x) 25% of that portion of Eligible Inventory of
the Canadian Borrower and its Subsidiaries at said date
(determined at the lower of cost or market on a consistent
basis) which consists of work-in-process relating to projects
for customers that are not account debtors with respect to any
Accounts owing to any Borrower and any of their Subsidiaries
which are not Eligible Accounts and (y) 50% of the aggregate
amount of all other Eligible Inventory of the Canadian
Borrower and its Subsidiaries at said date (determined at the
lower of cost or market on a consistent basis); provided that
the amount calculated pursuant to this clause (ii) shall not
exceed 50% of the Canadian Borrowing Base.
In the absence of a current Borrowing Base Certificate, Canadian Agent shall
determine the Canadian Borrowing Base from time to time in its reasonable
discretion, taking into account all information reasonably available to it, and
the Canadian Borrowing Base from time to time so determined shall be the
Canadian Borrowing Base for all purposes of this Agreement until a current
Borrowing Base Certificate, in Proper Form, is furnished to and accepted by
Canadian Agent. For
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purposes of calculating the Canadian Borrowing Base, all amounts or values
expressed in Canadian Dollars shall be converted into Dollars at the Exchange
Rate in effect as of the date of the applicable Borrowing Base Certificate.
Canadian Commitment means, as to any Canadian Lender, the obligation,
if any, of such Canadian Lender to make Canadian Revolving Loans, incur or
participate in Letter of Credit Liabilities relating to Canadian Letters of
Credit and accept and purchase Bankers' Acceptances in an aggregate principal
amount at any one time outstanding up to (but not exceeding) the amount, if any,
set forth opposite such Canadian Lender's name on the signature pages hereof
under the caption "Canadian Commitment", or otherwise provided for in an
Assignment and Acceptance (as the same may be increased or reduced from time to
time pursuant to Section 2.4 hereof).
Canadian Dollars or C$ means lawful money of Canada.
Canadian Dollar Revolving Notes means the Notes of Canadian Borrower
evidencing the Canadian Revolving Loans denominated in Canadian Dollars, in the
form of Exhibit H hereto.
Canadian Lender means each lender party hereto with any Canadian
Commitment or any outstanding Canadian Obligations.
Canadian Letters of Credit has the meaning assigned to such term in
Section 2.2 hereof.
Canadian Obligations means, as at any date of determination thereof,
the sum of the following (determined without duplication): (i) the aggregate
principal amount of Canadian Revolving Loans outstanding hereunder on such date,
plus (ii) the aggregate amount of the Bankers' Acceptance Liabilities
outstanding on such date, plus (iii) the aggregate amount of Letter of Credit
Liabilities outstanding on such date relating to Canadian Letters of Credit. For
purposes of calculating the aggregate amount of Canadian Obligations, all
amounts or values expressed in Canadian Dollars shall be converted into Dollars
at the Exchange Rate in effect as of the date of determination.
Canadian Prime Loans means Canadian Revolving Loans made pursuant to
Section 2.1(b) hereof which are denominated in Canadian Dollars.
Canadian Prime Rate means, on any day, as to Loans denominated in
Canadian Dollars made to Canadian Borrower, the greater of (a) the annual rate
of interest announced from time to time by RBC as its prime rate then in effect
at its Principal Office, being the reference rate used by RBC for determining
interest rates on commercial loans denominated in Canadian Dollars to borrowers
in Canada, and (b) an annual rate of interest equal to the sum of (i) the CDOR
Rate and (ii) 1.00% per annum. The Canadian Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate or a favored rate, and
Chase, RBC, Chase U.K., each Agent and each Lender disclaims any statement,
representation or warranty to the contrary. Chase, RBC, Chase U.K., any Agent or
any Lender may make commercial loans or other loans at rates of interest at,
above or below the Canadian Prime Rate.
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Canadian Revolving Loan means any revolving credit loan made pursuant
to Section 2.1(b) hereof.
Canadian Revolving Notes means the Notes of Canadian Borrower
evidencing the Canadian Revolving Loans denominated in Dollars, in the form of
Exhibit C hereto.
Capital Expenditures means, with respect to any Person for any period,
expenditures in respect of fixed or capital assets by such Person, including
capital lease obligations incurred during such period (to the extent not already
included), which would be reflected as additions to Property, plant or equipment
on a balance sheet of such Person and its consolidated Subsidiaries, if any,
prepared in accordance with GAAP; but excluding expenditures during such period
for the repair or replacement of any fixed or capital asset which was destroyed,
damaged or taken, in whole or in part, to the extent financed by the proceeds of
an insurance policy maintained by such Person or the proceeds of a condemnation
award.
CDOR Rate means, on any day, an annual rate of interest equal to the
average 30 day rate applicable to Canadian bankers' acceptances appearing on the
"Reuters Screen CDOR Page" on such day, or if such day is not a Business Day,
then on the immediately preceding Business Day; provided, however, if such rate
does not appear on the Reuters Screen CDOR Page as contemplated, then the CDOR
Rate on any day shall be calculated as the arithmetic mean of the 30 day rates
applicable to Canadian bankers' acceptances quoted by the Canadian Lenders which
are listed in Schedule I to the Bank Act (Canada) as of 12:00 noon (Toronto,
Ontario time) on such day, or if such day is not a Business Day, then on the
immediately preceding Business Day.
CD Reserve Rate means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors of the Federal Reserve System of the
United States of America to which the U.S. Agent is subject for new negotiable
nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months. The CD Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in such reserve
percentage.
Ceiling Rate means, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable United States federal
or Texas laws or, in the case of advances made in Canada by Canadian Lenders to
Canadian Borrower, whichever of applicable Canada federal or Ontario laws (or
the laws of any other jurisdiction whose usury laws are deemed to apply to the
Notes or any other Loan Documents despite the intention and desire of the
express choice of law provisions set forth herein) permits the higher interest
rate, stated as a rate per annum. On each day, if any, that the Texas Finance
Code establishes the Ceiling Rate, the Ceiling Rate shall be the "weekly
ceiling" (as defined in ss.303 of the Texas Finance Code) for that day. U.S.
Agent may from time to time, as to current and future balances, implement any
other ceiling under the Texas Finance Code by notice to Borrowers, if and to the
extent permitted by the Texas Finance Code. Without notice to Borrowers or any
other Person, the Ceiling Rate shall automatically fluctuate upward and downward
as and in the amount by which such maximum nonusurious rate of interest
permitted by applicable law fluctuates.
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Change of Control means a change resulting when any Unrelated Person or
any Unrelated Persons acting together which would constitute a Group together
with any Affiliates or Related Persons thereof (in each case also constituting
Unrelated Persons) shall at any time either (i) Beneficially Own more than 50%
of the aggregate voting power of all classes of Voting Stock of U.S. Borrower or
(ii) succeed in having sufficient of its or their nominees elected to the Board
of Directors of U.S. Borrower such that such nominees, when added to any
existing directors remaining on the Board of Directors of U.S. Borrower after
such election who is an Affiliate or Related Person of such Person or Group,
shall constitute a majority of the Board of Directors of U.S. Borrower. As used
herein (a) "Beneficially Own" means "beneficially own" as defined in Rule 13d-3
of the Securities Exchange Act of 1934, as amended, or any successor provision
thereto; provided, however, that, for purposes of this definition, a Person
shall not be deemed to Beneficially Own securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of such Person's
Affiliates until such tendered securities are accepted for purchase or exchange;
(b) "Group" means a "group" for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended; (c) "Unrelated Person" means at any time any
Person other than U.S. Borrower or any Subsidiary of U.S. Borrower and other
than any trust for any employee benefit plan of U.S. Borrower or any Subsidiary
of U.S. Borrower; (d) "Related Person" of any Person shall mean any other Person
owning (1) 5% or more of the outstanding common stock of such Person or (2) 5%
or more of the Voting Stock of such Person; and (e) "Voting Stock" of any Person
shall mean capital stock of such Person which ordinarily has voting power for
the election of directors (or persons performing similar functions) of such
Person, whether at all times or only so long as no senior class of securities
has such voting power by reason of any contingency.
Code means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal
or mixed, now or hereafter subject to the Liens created pursuant to any of the
Security Documents.
Commitment Fee Percentage means (i) on any day prior to April 1, 2002,
0.50% per annum and (ii) on and after April 1, 2002, the applicable per annum
percentage set forth at the appropriate intersection in the table shown below,
based on the Funded Debt to EBITDA Ratio as of the last day of the most recently
ended fiscal quarter of U.S. Borrower calculated by U.S. Agent as soon as
practicable after receipt by U.S. Agent of all financial reports required under
this Agreement with respect to such fiscal quarter (including a Compliance
Certificate) (provided, however, that if the Commitment Fee Percentage is
increased as a result of the reported Funded Debt to EBITDA Ratio, such increase
shall be retroactive to the date that U.S. Borrower was obligated to deliver
such financial reports to U.S. Agent pursuant to the terms of this Agreement and
provided further, however, that if the Commitment Fee Percentage is decreased as
a result of the reported Funded Debt to EBITDA Ratio, and such financial reports
are delivered to U.S. Agent not more than ten (10) calendar days after the date
required to be delivered pursuant to the terms of this Agreement, such decrease
shall be retroactive to the date that U.S. Borrower was obligated to deliver
such financial reports to U.S. Agent pursuant to the terms of this Agreement):
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Funded Debt to Commitment
EBITDA Ratio Fee Percentage
-------------- --------------
Greater than or equal to
2.50 to 1.00 0.50
Greater than or equal to
2.00 to 1.00 but less than
2.50 to 1.00 0.40
Greater than or equal to
1.50 to 1.00 but less than
2.00 to 1.00 0.35
Less than 1.50 to 1.00 0.30
Commitment Percentage means, as to any Lender, the percentage
equivalent of a fraction the numerator of which is the amount of such Lender's
U.S. Commitment, Canadian Commitment or U.K. Commitment, as the case may be, and
the denominator of which is the aggregate amount of the U.S. Commitments,
Canadian Commitments or U.K. Commitments, as the case may be, of all Lenders.
Compliance Certificate shall have the meaning given to it in Section
7.2(c) hereof.
Contribution Agreements means those certain Contribution Agreements
dated concurrently herewith executed by and among, respectively, (i) U.S.
Borrower and the guarantors in respect of the U.S. Obligations, (ii) Canadian
Borrower and the guarantors in respect of the Canadian Obligations and (iii)
U.K. Borrower and the guarantors in respect of the U.K. Obligations, as they may
from time to time be amended, modified, restated or supplemented.
Controlled Group means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code or under Applicable Canadian Pension
Legislation.
Corporation means any corporation, limited liability company,
partnership, joint venture, joint stock association, business trust and other
business entity.
Cover for Letter of Credit Liabilities or any Bankers' Acceptance
Liabilities shall be effected by paying to U.S. Agent, Canadian Agent or U.K.
Agent, as the case may be, immediately available funds, to be held by U.S.
Agent, Canadian Agent or U.K. Agent, as the case may be, in a collateral account
maintained by U.S. Agent, Canadian Agent or U.K. Agent, as the case may be, at
its Principal Office and collaterally assigned to U.S. Agent, Canadian Agent or
U.K. Agent, as the case may be, as security for the applicable Obligations using
documentation reasonably satisfactory to U.S. Agent, Canadian Agent or U.K.
Agent, as the case may be, in the amount required by any applicable provision
hereof. Such amount shall be retained by U.S. Agent, Canadian Agent or U.K.
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Agent, as the case may be, in such collateral account until such time as the
applicable Letter of Credit shall have expired and the Reimbursement
Obligations, if any, with respect thereto shall have been fully satisfied or the
applicable Bankers' Acceptance shall have matured and the related Bankers'
Acceptance Liabilities shall have been fully satisfied; provided, however, that
at such time if a Default or Event of Default has occurred and is continuing,
U.S. Agent, Canadian Agent or U.K. Agent, as the case may be, shall not be
required to release such amount in such collateral account from the time of such
collateral assignment until such Default or Event of Default shall have been
cured or waived.
Currency Exchange Risk Indebtedness means all obligations and
indebtedness of any Obligor with respect to the program for the hedging of
currency exchange risk provided for in any program entered into by such Obligor
for the purpose of reducing such Obligor's exposure to currency exchange
fluctuations and not for speculative purposes, approved in writing by U.S. Agent
(such approval not to be unreasonably withheld), as it may from time to time be
amended, modified, restated or supplemented.
Debt Service means, with respect to any Person for any period, the sum
of (i) Interest Expense for such period and (ii) scheduled principal payments on
obligations included within Borrowed Money Indebtedness for such period.
Default means an Event of Default or an event, act or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
Dollars, US$ and $ means lawful money of the United States of America.
Dual Lender means any Lender which has both a U.S. Commitment and
either a Canadian Commitment or a U.K. Commitment.
EBITDA means, without duplication, for any period the consolidated net
earnings (excluding any extraordinary gains or losses) of U.S. Borrower and its
Subsidiaries, on a consolidated basis, plus, to the extent deducted in
calculating consolidated net income, depreciation, amortization, other non-cash
items, Interest Expense and federal, state and provincial income tax expense
plus non-operating and medical retiree expenses of National Tank Company in an
aggregate amount not to exceed $1,500,000 and minus, to the extent added in
calculating consolidated net income, any non-cash items.
Eligible Accounts shall mean, as at any date of determination thereof,
each Account of a Person which is subject to a Lien created by any Security
Document and on which U.S. Agent (as to U.S. Borrower or any of its Subsidiaries
(other than Foreign Subsidiaries)) or Canadian Agent (as to any Subsidiary of
Canadian Borrower) or U.K. Agent (as to any Subsidiary of U.K. Borrower) shall
have a first-priority perfected Lien (subject only to Permitted Liens) which is
at said date payable to such Person and which complies with the following
requirements: (a) (i) the subject goods have been sold to an account debtor on
an absolute sale basis on open account and not on consignment, on approval or on
a "sale or return" basis or subject to any other repurchase or return agreement
and no material part of the subject goods has been returned, rejected, lost or
damaged (provided that the foregoing shall not disqualify accounts arising from
goods sold with usual and
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customary sales warranties or having warranty claims which are not material),
(ii) the Account is stated to be payable in Dollars (as to any Eligible Accounts
owned by U.S. Borrower or any of its Subsidiaries) or Canadian Dollars (as to
Canadian Borrower or any Subsidiary of Canadian Borrower) or Euros or Pounds (as
to U.K. Borrower or any Subsidiary of U.K. Borrower) and is not evidenced by
chattel paper or an instrument of any kind (unless the applicable Agent has a
perfected first priority Lien (subject only to Permitted Liens) on such chattel
paper or instrument) and said account debtor is not insolvent or the subject of
any bankruptcy or insolvency proceedings of any kind unless the applicable
Person has received a letter of credit, bond or other financial guarantee in an
amount equal to or greater than such Account issued by a Qualified Institution
and otherwise in form and substance satisfactory to Agents; (b) the account
debtor must be located in the United States (as to any Eligible Accounts owned
by U.S. Borrower or any of its Subsidiaries (other than Foreign Subsidiaries))
or in the United States or Canada (as to Canadian Borrower or any Subsidiary of
Canadian Borrower) or in the United States or the United Kingdom or any other
jurisdiction approved in writing by U.K. Agent (such approval not to be
unreasonably withheld) (as to U.K. Borrower or any Subsidiary of U.K. Borrower),
except for (x) Accounts as to which the applicable Person has received a letter
of credit, bond or other financial guarantee in an amount equal to or greater
than such Account issued by a Qualified Institution and otherwise in form and
substance satisfactory to Agents and (y) other Accounts approved in writing by
Agents; (c) it is a valid obligation of the account debtor thereunder and is not
subject to any offset or other defense on the part of such account debtor or to
any claim on the part of such account debtor denying liability thereunder
(provided that the foregoing shall not disqualify accounts arising from goods
sold with usual and customary sales warranties or having warranty claims which
are not material); (d) it is subject to no Lien whatsoever, except for the Liens
created or permitted pursuant to the Loan Documents; (e) it is evidenced by an
invoice submitted to the account debtor in timely fashion and in the normal
course of business; (f) it has not remained unpaid beyond 90 days after the date
of the invoice; (g) it does not arise out of transactions with an employee,
officer, agent, director or stockholder of the applicable Person or any
Affiliate of such Person; (h) not more than 20% (or such higher percentage as
Agents may approve in writing for any particular account debtor) of the other
Accounts of the applicable account debtor or any of its Affiliates fail to
satisfy all of the requirements of an "Eligible Account" (provided that this
clause shall not apply to Exxon-Mobil, Chevron, BP, Shell, Unocal or Texaco or
their Subsidiaries); (i) as to any Eligible Accounts owned by U.S. Borrower or
any of its Subsidiaries (other than U.K. Borrower or any of its Subsidiaries),
inclusion of the applicable Account does not cause the total Eligible Accounts
with respect to the applicable account debtor and its Affiliates, in the
aggregate, to exceed 10% of the total Eligible Accounts of the applicable
Borrower (provided, however, that the limitation set forth in this clause shall
not apply to Investment Grade Debtors), and (j) each of the representations and
warranties set forth in the Security Documents executed by the applicable Person
with respect thereto is true and correct in all material respects on such date.
Accounts for progress payments which are due under contracts entered into in the
ordinary course of business and that otherwise satisfy all of the above criteria
shall constitute Eligible Accounts (net of all amounts relating to advance
xxxxxxxx) for purposes of the Canadian Borrowing Base only. In the event of any
dispute under the foregoing criteria, about whether an Account is or has ceased
to be an Eligible Account, the decision of Agents, made in good faith, shall be
conclusive and binding, absent manifest error.
Eligible Inventory shall mean, as at any date of determination thereof,
Inventory of a Person which is subject to a Lien created by any Security
Documents and on which U.S. Agent (as to U.S.
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Borrower or any of its Subsidiaries (other than Foreign Subsidiaries)) or
Canadian Agent (as to any Subsidiary of Canadian Borrower) shall have a
first-priority perfected Lien (subject only to Permitted Liens) and which
complies with the following requirements: (a) such Inventory shall be valued in
accordance with GAAP and consist of (i) eligible raw materials, (ii)
work-in-process, (iii) finished goods and (iv) parts and components, provided
that all such Inventory shall be within the United States of America (as to U.S.
Borrower or any of its Subsidiaries (other than Foreign Subsidiaries)) or in the
United States of America or Canada (as to Canadian Borrower or any Subsidiary of
Canadian Borrower); (b) it is in good condition, meets all standards imposed by
any Governmental Authority having regulatory authority over it, its use and/or
sale and is either currently usable or currently salable in the normal course of
business of the applicable Person; (c) it is not in the possession or control of
any warehouseman, bailee, or any agent or processor for or customer of the
applicable Person or, if it is, (i) the applicable Person shall have notified,
in a manner that effectively under applicable law creates a valid and first
priority Lien in favor of the applicable Agent in such Inventory, such
warehouseman, bailee, agent, processor or customer of the applicable Agent's
Lien and (ii) such warehouseman, bailee, agent, processor or customer has
subordinated any Lien it may claim therein and agreed to hold all such Inventory
during the continuance of an Event of Default for the applicable Agent's account
subject to the applicable Agent's instructions, and (d) each of the
representations and warranties set forth in the Security Documents executed by
the applicable Person with respect thereto is true and correct in all material
respects on such date. In the event of any dispute under the foregoing criteria,
about whether a portion of Inventory is or has ceased to be Eligible Inventory,
the decision of Agents, made in good faith, shall be conclusive and binding,
absent manifest error.
Environmental Claim means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution, contamination, protection or clean-up
of the air, surface water, ground water or land; (iii) solid, gaseous or liquid
waste generation, handling, treatment, storage, disposal or transportation; (iv)
exposure to Hazardous Substances; (v) the safety or health of employees or (vi)
the manufacture, processing, distribution in commerce, use, discharge or storage
of Hazardous Substances. An "Environmental Claim" includes, but is not limited
to, a common law action, as well as a proceeding to issue, modify or terminate
an Environmental Permit to the extent that such a proceeding attempts to redress
violations of an applicable permit, license, or regulation as alleged by any
Governmental Authority.
Environmental Liabilities means all liabilities arising from any
Environmental Claim, Environmental Permit or Requirements of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to Property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the issuance, reissuance or
renewal of any Environmental Permit including reasonable attorneys' fees and
court costs.
Environmental Permit means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment,
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including laws, regulations or other requirements relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants or
hazardous substances or toxic materials or wastes into ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or Hazardous Substances.
Equity Interests means shares of the capital stock, partnership
interests, membership interest in a limited liability company, beneficial
interests in a trust or other equity interests in any Borrower or any of their
Subsidiaries or other applicable Person or any warrants, options or other rights
to acquire such interests.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the U.S. Department
of Labor thereunder and, as the context may require, Applicable Canadian Pension
Legislation.
Eurodollar Rate means for any day during an Interest Period for a LIBOR
Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
applicable Margin Percentage from time to time in effect and (b) the Ceiling
Rate. Each Eurodollar Rate is subject to adjustments for reserves, insurance
assessments and other matters as provided for in Sections 3.3 and 11.17 hereof.
Eurodollar Reserve Requirement means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth [.0001]) which is in effect on such day for determining all
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D. Each determination of the Eurodollar Reserve
Requirement by any Agent shall be conclusive and binding, absent manifest error,
and may be computed using any reasonable averaging and attribution method.
Euros means the lawful currency for the time being of the European
Community.
Event of Default shall have the meaning assigned to it in Section 9.1
hereof.
Excess Cash Flow means, without duplication, for any period, (i) EBITDA
for such period less (ii) the sum of the principal component of all Debt Service
of U.S. Borrower and its Subsidiaries (other than mandatory prepayments of the
Term Loans calculated on the basis of Excess Cash Flow), cash Interest Expense
of U.S. Borrower and its Subsidiaries, voluntary prepayments of all Borrowed
Money Indebtedness of U.S. Borrower and its Subsidiaries, federal, state and
provincial income taxes allocated to U.S. Borrower and its Subsidiaries,
Permitted Dividends (exclusive of dividends described in clause (iii) of the
definition of "Permitted Dividends") and Capital Expenditures of U.S. Borrower
and its Subsidiaries for such period.
Exchange Rate means, on any day, (a) with respect to Canadian Dollars
in relation to Dollars, the spot rate as quoted by The Bank of Canada as its
noon spot rate at which Dollars are offered on such day for Canadian Dollars,
(b) with respect to Dollars in relation to Canadian Dollars, the spot
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19
rate as quoted by The Bank of Canada as its noon spot rate at which Canadian
Dollars are offered on such day for Dollars, (c) with respect to Dollars in
relation to Pounds or Euros, the spot rate quoted by Chase U.K. as its noon spot
rate at which Pounds or Euros are offered on such day for Dollars on the London
foreign exchange market and (d) with respect to Pounds or Euros in relation to
Dollars, the spot rate quoted by Chase U.K. as its noon spot rate at which
Dollars are offered on such day for Pounds or Euros on the London foreign
exchange market.
Excluded Subsidiaries means (i) NATCO (UK) Limited, a company
incorporated in England and Wales under the Companies Act of the United Kingdom,
(ii) NATCO Oilfield Construction, Inc., a California corporation, (iii) Oilfield
Construction Company, Inc., a California corporation, (iv) NTC Technical
Services, a Delaware corporation, (vi) Dormant Axsia Limited, a company
incorporated in England and Wales under the Companies Act of the United Kingdom,
(vii) Xxxxx Xxxxx Limited, a company incorporated in England and Wales under the
Companies Act of the United Kingdom, (viii) Howmar Limited, a company
incorporated in England and Wales under the Companies Act of the United Kingdom,
(ix) Test, Inc., a Louisiana corporation, (x) Test Automation & Controls, Inc.,
a Louisiana corporation, and (xi) each Subsidiary of U.K. Borrower which is not
organized under the laws of the United Kingdom or any political subdivision
thereof.
EXIM Facility means that certain International Revolving Loan Agreement
dated June 30, 1997 executed by and between National Tank Company and Chase and
the other security documents contemplated thereby (as the foregoing may be
amended from time to time).
Federal Funds Rate means, for any day, a fluctuating interest rate per
annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any such day which is a
Business Day, the average of the quotations for such day on such transactions
received by U.S. Agent from three Federal funds brokers of recognized standing
selected by U.S. Agent in its sole and absolute discretion.
Financing Statements means all such Uniform Commercial Code or Canadian
provincial personal Property security financing statements or, in the case of a
Lien created in England and Wales, completed forms 395 in accordance with
Section 395 of the Companies Xxx 0000, as any Agent shall reasonably require, in
Proper Form, duly executed by the applicable Borrower (or any other applicable
Obligor) to give notice of and to perfect or continue perfection of the
applicable Agent's Liens in any applicable Collateral, as any of the foregoing
may from time to time be amended, modified, supplemented or restated.
Fixed Charge Coverage Ratio means, as of any day, the ratio of (a) Pro
Forma EBITDA for the 12 months ending on such day less the current portion of
federal, state and provincial income tax expense recognized during such 12-month
period to (b) the sum of (1) the principal component of Debt Service for such
12-month period plus (2) cash Interest Expense for such 12-month period paid by
U.S. Borrower and its Subsidiaries for such 12-month period plus (3) Permitted
Dividends by U.S. Borrower or by any Subsidiary of U.S. Borrower to any Person
other than U.S. Borrower (or a wholly-owned Subsidiary of U.S. Borrower) for
such 12-month period plus (4) actual Capital Expenditures paid by U.S. Borrower
and its Subsidiaries for such 12-month period.
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Foreign Subsidiaries means Subsidiaries which are organized under the
laws of a jurisdiction other than the United States of America, any State of the
United States or any political subdivision thereof.
Funded Debt to EBITDA Ratio means, as of any day, the ratio of (a)
Borrowed Money Indebtedness of U.S. Borrower and its Subsidiaries, on a
consolidated basis, as of such day (exclusive of the categories of Borrowed
Money Indebtedness, other than obligations in respect of bankers' acceptances,
described in clauses (vii), (viii) and (ix) of the definition of "Borrowed Money
Indebtedness" set forth in this Section 1.1) to (b) Pro Forma EBITDA for the 4
quarter period ending on the last day of the most recent fiscal quarter for
which financial statements are available.
Funding Loss means, with respect to (a) any Borrower's payment of
principal of a LIBOR Borrowing on a day other than the last day of the
applicable Interest Period; (b) any Borrower's failure to borrow a LIBOR
Borrowing or to borrow funds by way of Bankers' Acceptances on the date
specified by such Borrower; (c) any Borrower's failure to make any prepayment of
the Loans (other than Base Rate Borrowings and Canadian Prime Loans) on the date
specified by such Borrower, or (d) any cessation of a Eurodollar Rate to apply
to the Loans or any part thereof pursuant to Section 3.3, in each case whether
voluntary or involuntary, any loss, expense, penalty, premium or liability
actually incurred by any Lender (including but not limited to any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain a Loan).
GAAP means, as to a particular Person, such United States accounting
practice as, in the opinion of independent certified public accountants of
recognized national standing regularly retained by such Person, conforms at the
time to generally accepted accounting principles, consistently applied for all
periods after the Effective Date so as to present fairly the financial
condition, and results of operations and cash flows, of such Person. If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board, all reports and financial statements required
hereunder may be prepared in accordance with such change so long as the
applicable Person provides to Agents such disclosures of the impact of such
change as any Agent may reasonably require. No such change in any accounting
principle or practice shall, in itself, cause a Default or Event of Default
hereunder (but Borrowers, Agents and Lenders shall negotiate in good faith to
replace any financial covenants hereunder to the extent such financial covenants
are affected by such change in accounting principle or practice).
Governmental Authority means any governmental authority of the United
States of America, Canada, the United Kingdom, any State of the United States,
any Province of Canada, or of any other foreign jurisdiction and any political
subdivision of any of the foregoing, and any central bank, agency, department,
commission, board, bureau, court or other tribunal having or asserting
jurisdiction over any Agent, any Lender, any Obligor or their respective
Property.
Guaranties means, collectively, (i) the Guaranties dated concurrently
herewith executed by each Subsidiary of U.S. Borrower (other than Foreign
Subsidiaries and Excluded Subsidiaries) in favor of U.S. Agent, for the benefit
of U.S. Lenders, (ii) the Guaranties dated concurrently herewith executed by
U.S. Borrower and each Subsidiary of U.S. Borrower (other than Excluded
Subsidiaries and Foreign Subsidiaries which are not Subsidiaries of Canadian
Borrower) in favor of Canadian
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Agent, for the benefit of Canadian Lenders, (iii) the Guaranties dated
concurrently herewith executed by U.S. Borrower and each Subsidiary of U.S.
Borrower (other than Excluded Subsidiaries and Foreign Subsidiaries which are
Subsidiaries of U.K. Borrower) in favor of U.K. Agent, for the benefit of U.K.
Lenders and (iv) any and all other guaranties hereafter executed in favor of any
Agent, for the benefit of U.S. Lenders, Canadian Lenders or U.K. Lenders,
relating to the Obligations, as any of them may from time to time be amended,
modified, restated or supplemented.
Hazardous Substance means petroleum products, and any hazardous or
toxic waste or substance defined or regulated as such from time to time by any
law, rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Home Jurisdiction Withholding Taxes means withholding taxes imposed by
the United Kingdom.
Interest Expense means, for any period, total interest expense accruing
on Borrowed Money Indebtedness of U.S. Borrower and its Subsidiaries during such
period (including interest expense attributable to capitalized leases and net
costs under interest rate swap, collar, cap or similar agreements providing
interest rate protection), determined in accordance with GAAP.
Interest Options means the Base Rate, each Eurodollar Rate and, as to
the Canadian Dollar Revolving Notes only, the Canadian Prime Rate, and "Interest
Option" means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings and for
Canadian Prime Loans, March 31, 2001 and the last day of each March, June,
September and December thereafter prior to the Revolving Loan Maturity Date or
the Term Loan Maturity Date, as the case may be, and the Revolving Loan Maturity
Date or the Term Loan Maturity Date, as the case may be; and (b) for LIBOR
Borrowings, the end of the applicable Interest Period (and if such Interest
Period exceeds three months' duration, quarterly, commencing on the first
quarterly anniversary of the first day of such Interest Period) and the
Revolving Loan Maturity Date or the Term Loan Maturity Date, as the case may be.
Interest Period means, for each LIBOR Borrowing, a period commencing on
the date such LIBOR Borrowing began and ending on the numerically corresponding
day which is, subject to availability as set forth in Section 3.3(c)(iii), 1, 2,
3 or 6 months thereafter, as any Borrower shall elect in accordance herewith;
provided, (1) unless Agents shall otherwise consent, no Interest Period with
respect to a LIBOR Borrowing shall commence on a date earlier than three (3)
Business Days after this Agreement shall have been fully executed; (2) any
Interest Period with respect to a LIBOR Borrowing which would otherwise end on a
day which is not a Business Day shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day; (3) any
Interest Period with respect to a LIBOR Borrowing which begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the appropriate calendar month; (4) no
Interest Period for a Revolving Loan shall ever extend beyond the Revolving Loan
Maturity Date and no Interest Period for a Term Loan shall ever extend beyond
the Term Loan Maturity Date, and
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(5) Interest Periods shall be selected by each Borrower in such a manner that
the Interest Period with respect to any portion of the Loans which shall become
due shall not extend beyond such due date.
Interest Rate Risk Agreement means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by U.S. Borrower for the purpose of reducing U.S.
Borrower's and its Subsidiaries' exposure to interest rate fluctuations and not
for speculative purposes, as it may from time to time be amended, modified,
restated or supplemented. To the extent Interest Rate Risk Agreements cover
Borrowed Money Indebtedness exceeding $5,000,000, in the aggregate, the prior
written approval of U.S. Agent shall be required (such approval not to be
unreasonably withheld).
Interest Rate Risk Indebtedness means all obligations and indebtedness
of any Obligor with respect to the program for the hedging of interest rate risk
provided for in any Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities or
indebtedness of, or the making of any loan, advance, transfer of Property (other
than transfers in the ordinary course of business) or capital contribution to,
or the incurring of any liability (other than trade accounts payable arising in
the ordinary course of business), contingently or otherwise, in respect of the
indebtedness of, any Person.
Issuer means the issuer (or, where applicable, each issuer) of a Letter
of Credit under this Agreement.
Investment Grade Account Debtors means account debtors which are rated
A- or better by Standard & Poor's Ratings Services and A-3 or better by Xxxxx'x
Investors Service, Inc.
Key Agreements means the Purchase Agreement and the EXIM Facility.
Legal Requirement means any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, whether presently existing or arising in the future.
Lender Affiliate means, (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund which invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
Letter of Credit Liabilities means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount
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described in clause (i), in the case of any Letter of Credit payable in a
currency other than Dollars or Canadian Dollars, such amount shall be converted
by Agent to Dollars by any reasonable method, and such converted amount shall be
conclusive and binding, absent manifest error. For purposes of calculating the
aggregate amount of Letter of Credit Liabilities, all amounts or values
expressed in Canadian Dollars shall be converted into Dollars at the Exchange
Rate in effect as of the date of calculation.
Letters of Credit means the U.S. Letters of Credit, the Canadian
Letters of Credit and the U.K. Letters of Credit.
LIBOR means, for each Interest Period for any LIBOR Borrowing, the rate
per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) equal to
the average of the offered quotations appearing on Telerate Page 3750 (or if
such Telerate Page shall not be available, any successor or similar service as
may be selected by Agents and Borrowers) as of 11:00 a.m., Houston, Texas time
(in respect of a LIBOR Borrowing relating to the U.S. Loans) or 12:00 noon,
Toronto, Ontario time (in respect of a LIBOR Borrowing relating to the Canadian
Revolving Loans) or 12:00 noon, London, United Kingdom time (in respect of a
LIBOR Borrowing relating to the U.K. Revolving Loans) (or, in any case, as soon
thereafter as practicable) on the day two Business Days prior to the first day
of such Interest Period for deposits in Dollars having a term comparable to such
Interest Period and in an amount comparable to the principal amount of the LIBOR
Borrowing to which such Interest Period relates. If none of such Telerate Page
3750 nor any successor or similar service is available, then "LIBOR" shall mean,
with respect to any Interest Period for any applicable LIBOR Borrowing, the rate
of interest per annum, rounded upwards, if necessary, to the nearest 1/16th of
1%, quoted by U.S. Agent at or before 11:00 a.m., Houston, Texas time (in
respect of a LIBOR Borrowing relating to the U.S. Loans) or by Canadian Agent at
or before 12:00 noon, Toronto, Ontario time (in respect of a LIBOR Borrowing
relating to the Canadian Revolving Loans) or by U.K. Agent at or before 12:00
noon, London, United Kingdom time (in respect of a LIBOR Borrowing relating to
the U.K. Revolving Loans) (or, in any case, as soon thereafter as practicable),
on the date two Business Days before the first day of such Interest Period, to
be the arithmetic average of the prevailing rates per annum at the time of
determination and in accordance with the then existing practice in the
applicable market, for the offering to U.S. Agent, Canadian Agent or U.K. Agent,
as the case may be, by one or more prime banks selected by such Agent in its
sole discretion, in the London interbank market, of deposits in Dollars for
delivery on the first day of such Interest Period and having a maturity equal
(or as nearly equal as may be) to the length of such Interest Period and in an
amount equal (or as nearly equal as may be) to the LIBOR Borrowing to which such
Interest Period relates. Each determination by any Agent of LIBOR shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of the
Loans at any time bearing interest at a Eurodollar Rate.
Lien means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien (statutory or otherwise) or
restriction of any kind, whether based on common law, constitutional provision,
statute or contract, and shall include reservations, exceptions,
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encroachments, easements, rights of way, covenants, conditions, restrictions and
other title exceptions.
Loan Documents means, collectively, this Agreement, the Notes, the
Bankers' Acceptances, the Bankers' Acceptance Notices, the Guaranties, the
Contribution Agreements, all Applications, the Security Documents, the Notice of
Entire Agreement, all instruments, certificates and agreements now or hereafter
executed or delivered by any Obligor to any Agent or any Lender pursuant to any
of the foregoing or in connection with the Obligations or any commitment
regarding the Obligations, and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
Loans means the U.S. Revolving Loans, the Canadian Revolving Loans, the
U.K. Revolving Loans and the Term Loans provided for by Section 2.1 hereof.
Majority Lenders means, at any time while no Obligations are
outstanding, Lenders having greater than 51% of the aggregate amount of U.S.
Commitments, the Canadian Commitments and the U.K. Commitments, and at any time
while Obligations are outstanding, Lenders having greater than 51% of the sum of
outstanding Term Loans plus U.S. Commitments plus Canadian Commitments plus U.K.
Commitments; provided that if all U.S. Commitments, Canadian Commitments and
U.K. Commitments have terminated, the Majority Lenders shall be Lenders having
greater than 51% of the aggregate amount of all Obligations outstanding.
Margin Percentage means (i) on any day prior to April 1, 2002, 0.75%
per annum with respect to Base Rate Borrowings and Canadian Prime Loans and
2.25% per annum with respect to LIBOR Borrowings and (ii) on and after April 1,
2002, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Funded Debt to EBITDA Ratio
as of the last day of the then most recently ended fiscal quarter of U.S.
Borrower calculated by U.S. Agent as soon as practicable after receipt by U.S.
Agent of all financial reports required under this Agreement with respect to
such fiscal quarter (including a Compliance Certificate) (provided, however,
that if the Margin Percentage is increased as a result of the reported Funded
Debt to EBITDA Ratio, such increase shall be retroactive to the date that U.S.
Borrower was obligated to deliver such financial reports to U.S. Agent pursuant
to the terms of this Agreement and provided further, however, that if the Margin
Percentage is decreased as a result of the reported Funded Debt to EBITDA Ratio,
and such financial reports are delivered to U.S. Agent not more than ten (10)
calendar days after the date required to be delivered pursuant to the terms of
this Agreement, such decrease shall be retroactive to the date that U.S.
Borrower was obligated to deliver such financial reports to U.S. Agent pursuant
to the terms of this Agreement):
Canadian Prime Loans/
Funded Debt to LIBOR Borrowings Base Rate Borrowings
EBITDA Ratio Margin Percentage Margin Percentage
-------------- ----------------- ---------------------
Greater than or equal to
2.50 to 1.00 2.50 1.00
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Greater than or equal to
2.00 to 1.00 but less than
2.50 to 1.00 2.25 0.75
Greater than or equal to
1.50 to 1.00 but less than
2.00 to 1.00 2.00 0.50
Less than 1.50 to 1.00 1.75 0.25
Material Adverse Effect means any material and adverse effect (i) on
the validity or enforceability of any of the Loan Documents or any of the rights
or remedies of the Agents or the Lenders thereunder or (ii) on the business,
condition (financial or otherwise), results of operations, assets, liabilities
or prospects of U.S. Borrower and its Subsidiaries on a consolidated basis.
Maximum Canadian Available Amount means, at any date, an amount equal
to the lesser of (i) $10,000,000 or (ii) the then effective Canadian Borrowing
Base. In connection with the application of any provision hereof using the term
"Maximum Canadian Available Amount", any amounts denominated in Canadian Dollars
shall be converted to Dollars using the then current Exchange Rate. The Maximum
Canadian Available Amount is subject to change pursuant to Section 2.4(c)
hereof.
Maximum U.K. Available Amount means, at any date, an amount equal to
the lesser of (i) $5,000,000 or (ii) the then effective U.K. Borrowing Base. In
connection with the application of any provision hereof using the term "Maximum
U.K. Available Amount", any amounts denominated in Pounds or Euros shall be
converted to Dollars using the then current Exchange Rate. The Maximum U.K.
Available Amount is subject to change pursuant to Section 2.4(c) hereof.
Maximum U.S. Available Amount means, at any date, an amount equal to
the lesser of (i) $35,000,000 or (ii) the then effective U.S. Borrowing Base.
The Maximum U.S. Available Amount is subject to change pursuant to Section
2.4(c) hereof.
Net Worth means, with respect to U.S. Borrower and its Subsidiaries,
the sum of preferred stock (if any), par value of common stock, capital in
excess of par value of common stock and retained earnings.
Notes shall have the meaning assigned to such term in Section 2.7
hereof.
Notice of Entire Agreement means a notice of entire agreement, in
Proper Form, executed by Borrowers, each other Obligor and Agents, as the same
may from time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum of
the following: (i) the aggregate principal amount of Loans outstanding hereunder
on such date, plus (ii) the aggregate amount of the outstanding Letter of Credit
Liabilities on such date, plus (iii) the aggregate amount of outstanding
Bankers' Acceptance Liabilities on such date, plus (iv) all other outstanding
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liabilities, obligations and indebtedness of any Obligor under any Loan Document
on such date. For purposes of calculating the aggregate amount of Obligations,
all amounts or values expressed in Canadian Dollars, Pounds or Euros shall be
converted into Dollars at the applicable Exchange Rate in effect as of the date
of determination.
Obligors means each Borrower and each Person now or hereafter executing
a Guaranty and/or a Security Agreement.
Organizational Documents means, with respect to a United States
corporation, the certificate of incorporation, articles of incorporation and
bylaws of such corporation; with respect to a partnership, the partnership
agreement establishing such partnership; with respect to a trust, the instrument
establishing such trust and with respect to any other Person, the agreements or
instruments pursuant to which such Person was formed and by which such Person is
governed; in each case including any and all modifications thereof as of the
date of the Loan Document referring to such Organizational Document and any and
all future modifications thereof.
Past Due Rate means, on any day, a rate per annum equal to the lesser
of (i) the Ceiling Rate for that day or (ii) the applicable Base Rate or
Canadian Prime Rate, as the case may be, plus the Margin Percentage for Base
Rate Borrowings then in effect plus three percent (3%).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA and any pension commission
or similar body or fund constituted under any Applicable Canadian Pension
Legislation.
Permitted Dividends means (i) dividends or distributions by a
Subsidiary of U.S. Borrower to U.S. Borrower or any other Subsidiary (other than
a Foreign Subsidiary or an Excluded Subsidiary) of U.S. Borrower and dividends
or distributions by any Foreign Subsidiary of U.S. Borrower to any other Foreign
Subsidiary of U.S. Borrower, (ii) stock dividends, (iii) so long as no Default
or Event of Default shall have occurred and be continuing (or would result
therefrom) and so long as the payment required under Section 3.2(b)(2) hereof
for such fiscal year (based on Excess Cash Flow for the preceding fiscal year)
shall have been paid, dividends paid by U.S. Borrower to its shareholders for
the fiscal year 2001 and in each fiscal year thereafter in an aggregate amount
not to exceed fifty percent (50%) of net income for the preceding fiscal year.
Permitted Investments means: (a) readily marketable securities issued
or fully guaranteed by the full faith and credit of the United States of America
or of Canada or of the United Kingdom with maturities of not more than one year;
(b) commercial paper rated "Prime 1" by Xxxxx'x Investors Service, Inc. or "A-1"
by Standard and Poor's Ratings Services or the equivalent thereof by Dominion
Bond Rating Service Limited with maturities of not more than 180 days; (c)
certificates of deposit or repurchase obligations issued by any U.S., Canadian
or United Kingdom domestic bank having capital surplus of at least $100,000,000
or by any other financial institution acceptable to the Majority Lenders, all of
the foregoing not having a maturity of more than one year from the date of
issuance thereof, and (d) loans to Xxx Xxxxxxx not to exceed $3,600,000 at any
one time outstanding.
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Permitted Liens means each of the following: (a) Liens for taxes, but
only to the extent that payment thereof shall not at the time be due or if due,
the payment thereof is being diligently contested in good faith and adequate
reserves computed in accordance with GAAP have been set aside therefor; (b)
Liens in effect on the Effective Date and disclosed to the Lenders in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof or in a schedule hereto; (c) normal reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions and
encumbrances which do not secure Borrowed Money Indebtedness and which do not
have a material adverse effect on the value or utility of the applicable
Property; (d) Liens in favor of any Agent or any Lender under the Loan
Documents, including without limitation, Liens securing Interest Rate Risk
Indebtedness or Currency Exchange Risk Indebtedness owed to one or more of the
U.S. Lenders (but not to any Person which is not, at such time, a U.S. Lender);
(e) Liens incurred or deposits made in the ordinary course of business (1) in
connection with workmen's compensation, unemployment insurance, social security
and other like laws, or (2) to secure insurance in the ordinary course of
business, the performance of bids, tenders, contracts, leases, licenses,
statutory obligations, surety, appeal and performance bonds and other similar
obligations incurred in the ordinary course of business, not, in any of the
cases specified in this clause (2), incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of Property; (f) attachments, judgments and other similar Liens arising in
connection with court proceedings, provided that the execution and enforcement
of such Liens are effectively stayed and the claims secured thereby are being
actively contested in good faith with adequate reserves made therefor in
accordance with GAAP; (g) Liens imposed by law, such as landlords', carriers',
warehousemen's, artisans', mechanics', materialmen's and vendors' liens,
incurred in good faith in the ordinary course of business and securing
obligations which are not yet due or which are being contested in good faith by
appropriate proceedings if adequate reserves with respect thereto are maintained
in accordance with GAAP; (h) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, and restrictions on
the use of Property, and which do not in any case singly or in the aggregate
materially impair the present value or utility of the applicable Property; (i)
Liens securing purchase money indebtedness permitted under Section 8.1 hereof
and covering the Property so purchased; (j) capital leases and sale/leaseback
transactions permitted under the other provisions of this Agreement, and (k)
extensions, renewals and replacements of Liens referred to in clauses (a)
through (j) of this definition; provided that any such extension, renewal or
replacement Lien shall be limited to the Property or assets covered by the Lien
extended, renewed or replaced and that the Borrowed Money Indebtedness secured
by any such extension, renewal or replacement Lien shall be in an amount not
greater than the amount of the indebtedness secured by the Lien extended,
renewed or replaced.
Person means any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Plan means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code or any Applicable Canadian Pension Legislation and is either (a) maintained
by, or contributed to by, any Borrower or any member of the Controlled Group for
employees of any Borrower or any member of the Controlled Group or (b)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
any Borrower
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or any member of the Controlled Group is then making or accruing an obligation
to make contributions or has within the preceding five plan years made
contributions.
Pounds means the lawful currency for the time being of the United
Kingdom.
Prime Rate means, on any day, (a) as to Loans made to U.S. Borrower,
the rate of interest publicly announced by Chase as its prime rate in effect at
its principal office in New York City, (b) as to Loans denominated in Dollars
made to Canadian Borrower, the base rate for that day for Loans denominated in
Dollars quoted by RBC and (c) as to Loans made to U.K. Borrower, the rate for
that day for Loans denominated in Dollars quoted by Chase U.K. to prime banks in
the London interbank market for the relevant amount and the relevant period or
such other rate as notified by Chase U.K. to U.K. Borrower. The Prime Rate is,
in each case, a reference rate and does not necessarily represent the lowest or
best rate or a favored rate, and Chase, RBC, Chase U.K., each Agent and each
Lender disclaims any statement, representation or warranty to the contrary.
Chase, RBC, Chase U.K., any Agent or any Lender may make commercial loans or
other loans at rates of interest at, above or below the Prime Rate.
Principal Office means (a) as to Obligations of U.S. Borrower, the
principal office of U.S. Agent, presently located at 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxx Xxxxxx, Xxxxx 00000, (b) as to Obligations of Canadian Borrower, the
principal office of Canadian Agent, presently located at 000 Xxxxxx Xxxxxx XX,
00xx Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 and (c) as to Obligations of U.K.
Borrower, the principal office of U.K. Agent, presently located at Xxxxxxx
Xxxxx, 0 Xxxxxx Xxxx Xxxxxx, Xxxxxx, Xxxxxxx, XX X0X 0XX.
Pro Forma EBITDA means, for any period for which the amount thereof is
to be determined, EBITDA of U.S. Borrower and its Subsidiaries plus (or minus),
without duplication, on a pro forma basis for such period, EBITDA of any Person
becoming a Subsidiary of U.S. Borrower during such period (calculated as if such
Person had been a Subsidiary of U.S. Borrower for all of such period) and with
respect to which Agent and Lenders have been provided with Annual Financial
Statements for the most recently ended fiscal year of such Person (provided,
however, that unaudited annual financial statements for any applicable Person
for the most recently ended fiscal year of such Person shall be acceptable so
long as (i) such financial statements otherwise conform to the definition of
"Annual Financial Statements", (ii) such financial statements are certified by
the chief financial officer or other authorized officer of such Person as fairly
presenting, in all material respects, the financial position of such person as
of the applicable date or dates, and (iii) unaudited EBITDA does not comprise
more than 20% of Pro Forma EBITDA). U.S. Borrower shall furnish to Agent
supporting calculations for Pro Forma EBITDA and such other information as Agent
may reasonably request to determine the accuracy of such calculation.
Proper Form means in form and substance reasonably satisfactory to
Agents.
Property means any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
Purchase Agreement means that certain Sale and Purchase Agreement in
relation to the entire issued share capital of Axsia Group Limited dated as of
January 25, 2001 by and among U.S.
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Borrower, and the "Shareholders" and "Optionholders" set forth in Schedule 1
thereof, as the same may from time to time be amended, modified, restated or
supplemented.
Qualified Institution means (a) any bank or trust company which is
organized under the laws of any country which is a member of the Organization
for Economic Cooperation and Development or any political subdivision of any
such country; and having capital, surplus and undivided profits aggregating at
least $100,000,000.00 (or its equivalent in another currency) as of the date of
such Person's most recent financial reports, and (b) any other Person approved
in writing by Agents.
Quarterly Dates means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Quarterly Financial Statements means the quarterly financial statements
of a Person, which statements shall include a balance sheet as of the end of the
applicable fiscal quarter and an income statement and a statement of cash flows
for such fiscal quarter and for the fiscal year to date, subject to normal
year-end adjustments, all setting forth in comparative form the corresponding
figures as of the end of and for the corresponding fiscal quarter of the
preceding year, prepared in accordance with GAAP in all material respects except
that such statements are condensed and exclude detailed footnote disclosures and
certified by the chief financial officer or other authorized officer of such
Person as fairly presenting, in all material respects, the consolidated
financial condition of such person as of such date. As to U.S. Borrower only,
Quarterly Financial Statements shall also include unaudited consolidating
financial statements for U.S. Borrower and its Subsidiaries, in Proper Form,
certified by the chief financial officer or other authorized officer of U.S.
Borrower as presenting fairly in all material respects the consolidating
financial position of U.S. Borrower and its Subsidiaries.
Rate Designation Date means that Business Day which is (a) in the case
of Base Rate Borrowings by the U.S. Borrower, 11:00 a.m., Houston, Texas time,
in the case of Base Rate Borrowings by the Canadian Borrower, 12:00 noon,
Toronto, Ontario time, and in the case of Base Rate Borrowings by the U.K.
Borrower, 11:00 a.m., London, United Kingdom time, in each case on the date one
Business Day preceding the date of such borrowing and (b) in the case of LIBOR
Borrowings by the U.S. Borrower, 11:00 a.m., Houston, Texas time, in the case of
LIBOR Borrowings by the Canadian Borrower, 12:00 noon, Toronto, Ontario time and
in the case of LIBOR Borrowings by the U.K. Borrower, 11:00 a.m., London, United
Kingdom time, in each case on the date three Business Days preceding the first
day of any proposed Interest Period.
Rate Designation Notice means a written notice substantially in the
form of Exhibit B.
Refunding Bankers' Acceptance has the meaning specified in Section
2.3(b).
Regulation D means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and includes any successor or
other regulation relating to reserve requirements applicable to member banks of
the Federal Reserve System.
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Regulatory Change means with respect to any Lender, any change on or
after the Effective Date in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of lenders including
such Lender under any Legal Requirements (whether or not having the force of
law) by any Governmental Authority.
Reimbursement Obligations means, as at any date, (i) the obligations of
any Borrower then outstanding, or which may thereafter arise, in respect of
Letters of Credit under this Agreement, to reimburse the applicable Issuers for
the amount paid by such Issuers in respect of any drawing under such Letters of
Credit and (ii) the obligations of the Canadian Borrower then outstanding, or
which may thereafter arise, in respect of any Bankers' Acceptance purchased by
any Canadian Lender or paid by it on maturity thereof. Except for Canadian
Letters of Credit denominated in Canadian Dollars, Reimbursement Obligations in
respect of any Letter of Credit shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other than
Dollars.
Request for Extension of Credit means a request for extension of credit
duly executed by any responsible officer, which may include the president, chief
executive officer, the chief financial officer, any vice president or the
treasurer of U.S. Borrower, Canadian Borrower or U.K. Borrower, as the case may
be, or any other Person duly authorized by one of such officers, appropriately
completed and substantially in the form of Exhibit A-1 (U.S. Borrower), Exhibit
A-2 (Canadian Borrower) or Exhibit A-3 (U.K. Borrower) attached hereto, as the
case may be.
Requirements of Environmental Law means all requirements imposed by any
law (including for example and without limitation The Resource Conservation and
Recovery Act and The Comprehensive Environmental Response, Compensation, and
Liability Act), rule, regulation, or order of any federal, state or local
executive, legislative, judicial, regulatory or administrative agency, board or
authority in effect at the applicable time which relate to (i) noise; (ii)
pollution, protection or clean-up of the air, surface water, ground water or
land; (iii) solid, gaseous or liquid waste generation, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) regulation of the manufacture, processing,
distribution in commerce, use, discharge or storage of Hazardous Substances.
Reset Date has the meaning specified in Section 2.9(a).
Restricted Indebtedness means Borrowed Money Indebtedness of the
Borrowers or any of their Subsidiaries, the payment, prepayment, redemption,
repurchase or defeasance of which is restricted under Article 8 hereof.
Revolving Loan Maturity Date means the maturity of the Revolving Notes
and the other U.S. Revolving Loan Obligations, Canadian Obligations and U.K.
Obligations, March 31, 2004.
Revolving Loans means the U.S. Revolving Loans, the U.K. Revolving
Loans and the Canadian Revolving Loans.
Revolving Notes means the U.S. Revolving Notes, the U.K. Revolving
Notes, Canadian Dollar Revolving Notes and the Canadian Revolving Notes.
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Security Agreements means (i) security agreements, each in Proper Form,
executed or to be executed in favor of U.S. Agent, securing the U.S.
Obligations, covering all of the real Property (other than real Property owned
as of the Effective Date) upon which a Lien must be granted pursuant to Section
7.11 hereof and material personal Property (other than the Equity Interests
described in clauses (ii) and (iv) of this definition) of U.S. Borrower and its
Subsidiaries (other than Foreign Subsidiaries or Excluded Subsidiaries), (ii)
security agreements, each in Proper Form, executed or to be executed in favor of
U.S. Agent, securing the U.S. Obligations, covering all of the issued and
outstanding Equity Interests in any Subsidiary of U.S. Borrower (other than
Foreign Subsidiaries and Excluded Subsidiaries and other than Subsidiaries which
are wholly-owned direct Subsidiaries of Foreign Subsidiaries) and 65% of the
issued and outstanding Equity Interests in U.K. Borrower and Canadian Borrower,
(iii) security agreements, each in Proper Form, executed or to be executed in
favor of Canadian Agent, securing the Canadian Obligations, covering all of the
real Property (other than real Property owned as of the Effective Date) upon
which a Lien must be granted pursuant to Section 7.11 hereof and material
personal Property of Canadian Borrower and each of its Subsidiaries (including
all Equity Interests in any Subsidiary of Canadian Borrower), and (iv) security
agreements, each in Proper Form, executed or to be executed in favor of U.K.
Agent, securing the U.K. Obligations, covering all of the real Property (other
than real Property owned as of the Effective Date) upon which a Lien must be
granted pursuant to Section 7.11 hereof and material personal Property of U.K.
Borrower and each of its Subsidiaries but which is not an Excluded Subsidiary
(including all Equity Interests in any Subsidiary of U.K. Borrower which is not
an Excluded Subsidiary), as the same may from time to time be amended, modified,
restated or supplemented.
Security Documents means, collectively, the Security Agreements, the
Financing Statements and any and all other security documents now or hereafter
executed and delivered by any Obligor to secure all or any part of the
Obligations, as any of them may from time to time be amended, modified, restated
or supplemented.
Stated Rate means, with respect to any Lender, the effective weighted
per annum rate of interest applicable to the Loans made by such Lender;
provided, that if on any day such rate shall exceed the Ceiling Rate for that
day, the Stated Rate shall be fixed at the Ceiling Rate on that day and on each
day thereafter until the total amount of interest accrued at the Stated Rate on
the unpaid principal balances of the Notes plus the Additional Interest equals
the total amount of interest which would have accrued if there had been no
Ceiling Rate. If the Notes mature (or are prepaid) before such equality is
achieved, then, in addition to the unpaid principal and accrued interest then
owing pursuant to the other provisions of the Loan Documents, the applicable
Borrower promises to pay on demand to the order of the holder of the applicable
Note interest in an amount equal to the excess (if any) of (a) the lesser of (i)
the total interest which would have accrued on such Note if the Stated Rate had
been defined as equal to the Ceiling Rate from time to time in effect and (ii)
the total interest which would have accrued on such Note if the Stated Rate were
not so prohibited from exceeding the Ceiling Rate, over (b) the total interest
actually accrued on such Note to such maturity (or prepayment) date. Without
notice to any Borrower or any other Person, the Stated Rate shall automatically
fluctuate upward and downward in accordance with the provisions of this
definition.
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Subsidiary means, as to a particular parent Corporation, any
Corporation of which more than 50% of the indicia of equity rights (whether
outstanding capital stock or otherwise) is at the time directly or indirectly
owned by, such parent Corporation.
Synthetic Purchase Agreement means any swap, derivative or other
agreement or combination of agreements pursuant to which any Borrower or a
Subsidiary of any Borrower is or may become obligated to make (i) any payment in
connection with a purchase by any third party from a Person other than the
applicable Borrower or a Subsidiary of the applicable Borrower of any Equity
Interest or Restricted Indebtedness or (ii) any payment (other than on account
of a permitted purchase by it of any Equity Interest or any Restricted
Indebtedness) the amount of which is determined by reference to the price or
value at any time of any Equity Interest or Restricted Indebtedness; provided
that no phantom stock or similar plan providing for payments only to current or
former directors, officers or employees of any Borrower or Subsidiaries of any
Borrower (or to their heirs or estates) shall be deemed to be a Synthetic
Purchase Agreement.
Taxes shall have the meaning ascribed to it in Section 4.1(d) hereof.
Termination Date means the earlier of (a) the Revolving Loan Maturity
Date or (b) the date specified by either Agent in accordance with Section 9.1
hereof.
Term Loan means a Loan made pursuant to Section 2.1(e) hereof.
Term Loan Lender means each U.S. Lender with any outstanding Term
Loans.
Term Loan Maturity Date means March 31, 2006.
Term Loan Obligations means, as at any date of determination thereof,
the aggregate principal amount of Term Loans outstanding hereunder on such date.
Term Notes means the Notes of U.S. Borrower evidencing the Term Loans,
in substantially the form of Exhibit J hereto.
Three-Month Secondary CD Rate means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board of Governors of the Federal Reserve System of the United States of
America through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board of
Governors of the Federal Reserve System of the United States of America, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the U.S.
Agent from three negotiable certificate of deposit dealers of recognized
standing selected by it.
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Total Canadian Exposure means, at any time and without duplication, the
sum of the aggregate principal amounts of the then outstanding Canadian
Revolving Loans, then outstanding Bankers' Acceptance Liabilities and then
outstanding Letter of Credit Liabilities in respect of Canadian Letters of
Credit, in each case expressed in Dollars using, where applicable, the then
current Exchange Rate.
U.K. Borrowing Base means, as at any date, the amount of the U.K.
Borrowing Base shown on the Borrowing Base Certificate then most recently
delivered pursuant to Section 7.2(f) hereof, determined by calculating the
amount equal to the sum of (x) 70% of the aggregate amount of all Eligible
Accounts of the U.K. Borrower and its Subsidiaries which are Foreign
Subsidiaries (other than Excluded Subsidiaries) at said date and (y) 50% of the
aggregate amount of all Amounts Recoverable on Contracts of the U.K. Borrower
and its Subsidiaries which are Foreign Subsidiaries (other than Excluded
Subsidiaries) at said date. In the absence of a current Borrowing Base
Certificate, U.K. Agent shall determine the U.K. Borrowing Base from time to
time in its reasonable discretion, taking into account all information
reasonably available to it, and the U.K. Borrowing Base from time to time so
determined shall be the U.K. Borrowing Base for all purposes of this Agreement
until a current Borrowing Base Certificate, in Proper Form, is furnished to and
accepted by U.K. Agent. For purposes of calculating the U.K. Borrowing Base, all
amounts or values expressed in Pounds or Euros shall be converted into Dollars
at the Exchange Rate in effect as of the date of the applicable Borrowing Base
Certificate.
U.K. Commitment means, as to any U.K. Lender, the obligation, if any,
of such U.K. Lender to make U.K. Revolving Loans, incur or participate in Letter
of Credit Liabilities relating to U.K. Letters of Credit in an aggregate
principal amount at any one time outstanding up to (but not exceeding) the
amount, if any, set forth opposite such U.K. Lender's name on the signature
pages hereof under the caption "U.K. Commitment", or otherwise provided for in
an Assignment and Acceptance (as the same may be increased or reduced from time
to time pursuant to Section 2.4 hereof).
U.K. Lender means each lender party hereto with any U.K. Commitment or
any outstanding U.K. Obligations.
U.K. Letters of Credit has the meaning assigned to such term in Section
2.2 hereof.
U.K. Obligations means, as at any date of determination thereof, the
sum of the following (determined without duplication): (i) the aggregate
principal amount of U.K. Revolving Loans outstanding hereunder on such date,
plus (ii) the aggregate amount of Letter of Credit Liabilities outstanding on
such date relating to U.K. Letters of Credit. For purposes of calculating the
aggregate amount of U.K. Obligations, all amounts or values expressed in Pounds
or Euros shall be converted into Dollars at the Exchange Rate in effect as of
the date of determination.
U.K. Revolving Loan means any revolving credit loan made pursuant to
Section 2.1(c) hereof.
U.K. Revolving Notes means the Notes of U.K. Borrower evidencing the
U.K. Revolving Loans, in the form of Exhibit L hereto.
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Unfunded Liabilities means, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent actuarial valuation report for such
Plan, but only to the extent that such excess represents a potential liability
of any member of the Controlled Group to the PBGC or a Plan under Title IV of
ERISA and, with respect to any Plan governed by Applicable Canadian Pension
Legislation, the amount (if any) by which the solvency liabilities under such
Plan (determined in accordance with actuarial assumptions contained in the most
recent actuarial valuation report for such Plan) exceed the fair market value of
the assets of such Plan. With respect to multi-employer Plans, the term
"Unfunded Liabilities" shall also include contingent liability for withdrawal
liability under Section 4201 of ERISA or under Applicable Canadian Pension
Legislation to all multi-employer Plans to which any Borrower or any member of a
Controlled Group for employees of any Borrower contributes in the event of
complete withdrawal from such plans.
U.S. Borrowing Base means, as at any date, the amount of the U.S.
Borrowing Base shown on the Borrowing Base Certificate then most recently
delivered pursuant to Section 7.2(f) hereof, determined by calculating the
amount equal to:
(i) the sum of 80% of the aggregate amount of all Eligible
Accounts of the U.S. Borrower and its Subsidiaries (other than
Foreign Subsidiaries and Excluded Subsidiaries) at said date,
plus
(ii) the sum of (x) 25% of that portion of Eligible Inventory of
the U.S. Borrower and its Subsidiaries (other than Foreign
Subsidiaries and Excluded Subsidiaries) at said date
(determined at the lower of cost or market on a consistent
basis) which consists of work-in-process relating to projects
for customers that are not account debtors with respect to any
Accounts owing to any Borrower and any of their Subsidiaries
which are not Eligible Accounts and (y) 50% of the aggregate
amount of all other Eligible Inventory of U.S. Borrower and
its Subsidiaries (other than Foreign Subsidiaries and Excluded
Subsidiaries) at said date (determined at the lower of cost or
market on a consistent basis); provided that the amount
calculated pursuant to this clause (ii) shall not exceed 50%
of the U.S. Borrowing Base.
In the absence of a current Borrowing Base Certificate, U.S. Agent shall
determine the U.S. Borrowing Base from time to time in its reasonable
discretion, taking into account all information reasonably available to it, and
the U.S. Borrowing Base from time to time so determined shall be the U.S.
Borrowing Base for all purposes of this Agreement until a current Borrowing Base
Certificate, in Proper Form, is furnished to and accepted by U.S. Agent.
U.S. Commitment means, as to any U.S. Lender, the obligation, if any,
of such U.S. Lender to make U.S. Revolving Loans and incur or participate in
Letter of Credit Liabilities relating to U.S. Letters of Credit in an aggregate
principal amount at any one time outstanding up to (but not exceeding) the
amount, if any, set forth opposite such U.S. Lender's name on the signature
pages hereof under the caption "U.S. Commitment", or otherwise provided for in
an Assignment and
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Acceptance (as the same may be increased or reduced from time to time pursuant
to Section 2.4 hereof).
U.S. Lender means each lender party hereto with any U.S. Commitment or
any outstanding U.S. Obligations.
U.S. Letters of Credit shall have the meaning assigned to such term in
Section 2.2 hereof.
U.S. Loan means a U.S. Revolving Loan or a Term Loan.
U.S. Obligations means U.S. Revolving Loan Obligations and Term Loan
Obligations.
U.S. Revolving Loan means a Loan made pursuant to Section 2.1(a)
hereof.
U.S. Revolving Loan Obligations means, as at any date of determination
thereof, the sum of the following (determined without duplication): (i) the
aggregate principal amount of U.S. Revolving Loans outstanding hereunder on such
date plus (ii) the aggregate amount of the Letter of Credit Liabilities
outstanding on such date relating to U.S. Letters of Credit.
U.S. Revolving Notes means the Notes of U.S. Borrower evidencing the
U.S. Revolving Loans, in the form of Exhibit D hereto.
1.2 Miscellaneous. The words "hereof," "herein," and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement.
2. Commitments; Loans; BA's and Letters of Credit.
2.1 Loans and BA's. Each Lender severally agrees, subject to all of the
terms and conditions of this Agreement (including, without limitation, Sections
5.1 and 5.2 hereof), to make Loans and, in the case of Canadian Lenders, to
accept and purchase Bankers' Acceptances, as follows:
(a) U.S. Revolving Loans. From time to time on or after the Effective
Date and during the Availability Period, each U.S. Lender shall make loans under
this Section 2.1(a) to U.S. Borrower in an aggregate principal amount at any one
time outstanding (including its Commitment Percentage of all Letter of Credit
Liabilities relating to U.S. Letters of Credit at such time) up to but not
exceeding such U.S. Lender's Commitment Percentage of the Maximum U.S. Available
Amount. Subject to the conditions in this Agreement, any such U.S. Revolving
Loan repaid prior to the Termination Date may be reborrowed pursuant to the
terms of this Agreement; provided, that any and all such U.S. Revolving Loans
shall be due and payable in full on the Termination Date. Loans made under this
Section 2.1(a) shall be made and denominated in Dollars. The aggregate of all
U.S. Revolving Loans to be made by the U.S. Lenders in connection with a
particular borrowing shall be equal to the lesser of (i) the unutilized portion
of the U.S. Commitments or (ii) $500,000 or any integral multiple of $100,000 in
excess thereof.
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(b) Canadian Revolving Loans. From time to time on or after the
Effective Date and during the Availability Period, each Canadian Lender shall
make loans under this Section 2.1(b) to Canadian Borrower in an aggregate
principal amount at any one time outstanding (including such Canadian Lender's
Commitment Percentage of all Bankers' Acceptance Liabilities and all Letter of
Credit Liabilities relating to Canadian Letters of Credit at such time) up to
but not exceeding such Canadian Lender's Commitment Percentage of the Maximum
Canadian Available Amount. Subject to the conditions in this Agreement, any such
Canadian Revolving Loan repaid prior to the Termination Date may be reborrowed
pursuant to the terms of this Agreement; provided, that any and all such
Canadian Revolving Loans shall be due and payable in full on the Termination
Date. Loans made under this Section 2.1(b) may, at the option of Canadian
Borrower, be made and denominated either in Dollars or in Canadian Dollars (but
all Loans to be made under a particular borrowing must be made and denominated
in the same currency). The aggregate of all Canadian Revolving Loans to be made
by the Canadian Lenders in connection with a particular borrowing shall be equal
to the lesser of (i) the unutilized portion of the Canadian Commitments or (ii)
$500,000 or any integral multiple of $100,000 in excess thereof (if the Loans
are denominated in Dollars) or C$500,000 or any integral multiple of C$100,000
in excess thereof (if the Loans are denominated in Canadian Dollars).
(c) U.K. Revolving Loans. From time to time on or after the Effective
Date and during the Availability Period, each U.K. Lender shall make loans under
this Section 2.1(c) to U.K. Borrower in an aggregate principal amount at any one
time outstanding (including its Commitment Percentage of all Letter of Credit
Liabilities relating to U.K. Letters of Credit at such time) up to but not
exceeding such U.K. Lender's Commitment Percentage of the Maximum U.K. Available
Amount. Subject to the conditions in this Agreement, any such U.K. Revolving
Loan repaid prior to the Termination Date may be reborrowed pursuant to the
terms of this Agreement; provided, that any and all such U.K. Revolving Loans
shall be due and payable in full on the Termination Date. Loans made under this
Section 2.1(c) shall be made and denominated in Dollars. The aggregate of all
U.K. Revolving Loans to be made by the U.K. Lenders in connection with a
particular borrowing shall be equal to the lesser of (i) the unutilized portion
of the U.S. Commitments or (ii) $500,000 or any integral multiple of $100,000 in
excess thereof.
(d) Bankers' Acceptances. From time to time on or after the Effective
Date and during the Availability Period, each Canadian Lender shall accept and
purchase Bankers' Acceptances drawn on it under Section 2.3 hereof by Canadian
Borrower in an aggregate principal amount at any one time outstanding (including
such Canadian Lender's Commitment Percentage of all Canadian Revolving Loans
outstanding at such time and all Letter of Credit Liabilities relating to
Canadian Letters of Credit at such time) up to but not exceeding such Canadian
Lender's Commitment Percentage of the Maximum Canadian Available Amount. No
Bankers' Acceptance may be made or accepted on or after the Termination Date and
all outstanding Bankers' Acceptances shall mature no later than the end of the
Availability Period. Loans made by way of Bankers' Acceptances shall be made and
denominated in Canadian Dollars.
(e) Term Loans. On the Effective Date, each Term Loan Lender shall make
a loan to U.S. Borrower in the amount set forth opposite such Term Loan Lender's
name on the signature pages hereof under the caption "Term Loans".
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(f) Chapter 346 Not Applicable. Borrowers, Agents and the Lenders agree
pursuant to Chapter 346 ("Chapter 346") of the Texas Finance Code, that Chapter
346 (which relates to open- end line of credit revolving loan accounts) shall
not apply to this Agreement, the Notes or any Obligation and that neither the
Notes nor any Obligation shall be governed by Chapter 346 or subject to its
provisions in any manner whatsoever.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit Liabilities
relating to U.S. Letters of Credit shall never exceed $25,000,000 and that
aggregate Letter of Credit Liabilities relating to Canadian Letters of Credit
shall never exceed $5,000,000 and that aggregate Letter of Credit Liabilities
relating to U.K. Letters of Credit shall never exceed $5,000,000, (i) U.S.
Borrower shall have the right, in addition to U.S. Revolving Loans provided for
in Section 2.1(a) hereof, to utilize the U.S. Commitments from time to time
during the Availability Period by obtaining the issuance of letters of credit if
U.S. Borrower shall so request in the notice referred to in Section 2.2(b)(i)
hereof (such letters of credit as any of them may be amended, supplemented,
extended or confirmed from time to time, being herein collectively called the
"U.S. Letters of Credit"), Canadian Borrower shall have the right, in addition
to Canadian Revolving Loans provided for in Section 2.1(b) hereof and Bankers'
Acceptances provided for in Section 2.1(d) hereof, to utilize the Canadian
Commitments from time to time during the Availability Period by obtaining the
issuance of letters of credit if Canadian Borrower shall so request in the
notice referred to in Section 2.2(b)(i) hereof (such letters of credit as any of
them may be amended, supplemented, extended or confirmed from time to time,
being herein collectively called the "Canadian Letters of Credit") and U.K.
Borrower shall have the right, in addition to U.K. Revolving Loans provided for
in Section 2.1(c) hereof, to utilize the U.K. Commitments from time to time
during the Availability Period by obtaining the issuance of letters of credit if
U.K. Borrower shall so request in the notice referred to in Section 2.2(b)(i)
hereof (such letters of credit as any of them may be amended, supplemented,
extended or confirmed from time to time, being herein collectively called the
"U.K. Letters of Credit") and (ii) Chase agrees to issue U.S. Letters of Credit,
RBC agrees to issue Canadian Letters of Credit and Chase U.K. agrees to issue
U.K. Letters of Credit. The Letters of Credit will, at the request of the
applicable Borrower, be issued in currencies other than those expressly provided
for in this Agreement so long as the applicable Agent is reasonably satisfied
that such currency is readily available in the required amounts and that such
currency selection is not otherwise disadvantageous to any Agent or any Lender.
Upon the date of the issuance of a Letter of Credit, the applicable Issuer shall
be deemed, without further action by any party hereto, to have sold to each U.S.
Lender, Canadian Lender or U.K. Lender, as the case may be, and each such U.S.
Lender, Canadian Lender or U.K. Lender, as the case may be, shall be deemed,
without further action by any party hereto, to have purchased from the
applicable Issuer, a participation, to the extent of such Lender's Commitment
Percentage, in such Letter of Credit and the related Letter of Credit
Liabilities, which participation shall terminate on the earlier of the
expiration date of such Letter of Credit or the Termination Date. Any Letter of
Credit that shall have an expiration date after the date which is five (5)
Business Days prior to the end of the Availability Period shall be subject to
Cover or backed by a letter of credit in form and substance, and issued by a
Person, acceptable to the applicable Agent in its sole discretion, such Cover to
be delivered to the applicable Agent no later than the date which is one (1)
year prior to the end of the Availability Period. Chase or, with the prior
approval of U.S. Borrower, U.S. Agent and the
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applicable U.S. Lender, another U.S. Lender shall be the Issuer of each U.S.
Letter of Credit; RBC or, with the prior approval of Canadian Borrower, Canadian
Agent and the applicable Canadian Lender, another Canadian Lender shall be the
Issuer of each Canadian Letter of Credit and Chase U.K. or, with the prior
approval of U.K. Borrower, U.K. Agent and the applicable U.K. Lender, another
U.K. Lender shall be the Issuer of each U.K. Letter of Credit. Except as
provided above, all U.S. Letters of Credit and U.K. Letters of Credit shall be
denominated in Dollars and all Canadian Letters of Credit shall, at the option
of Canadian Borrower, be denominated in either Dollars or Canadian Dollars. Fees
due in respect of a U.S. Letter of Credit or a U.K. Letter of Credit shall be
payable in Dollars and fees due in respect of a Canadian Letter of Credit shall
be payable (i) in Dollars, if such Letter of Credit is denominated in Dollars
and (ii) in Canadian Dollars if such Letter of Credit is denominated in Canadian
Dollars or any other currency. Letters of credit previously issued under the
provisions of the Loan Agreement dated November 20, 1998 described in Section
11.21 hereof shall constitute "Letters of Credit" hereunder and letters of
credit issued by U.S. Agent under the EXIM Facility and subsequently designated
by U.S. Borrower for treatment as "Letters of Credit" hereunder (such
designation to be subject to the same conditions and restrictions as would apply
if such letter of credit were being newly issued hereunder, including without
limitation the payment of fees relating to the issuance of Letters of Credit)
shall constitute "Letters of Credit" hereunder.
(b) Additional Provisions. The following additional provisions shall
apply to each Letter of Credit:
(i) U.S. Borrower, Canadian Borrower or U.K. Borrower, as the
case may be, shall give the appropriate Agent notice requesting each
issuance of a Letter of Credit hereunder as provided in Section 4.3
hereof and shall furnish such additional information regarding such
transaction as such Agent may reasonably request. Upon receipt of such
notice, such Agent shall promptly notify each U.S. Lender, Canadian
Lender or U.K. Lender, as the case may be, of the contents thereof and
of such Lender's Commitment Percentage of the amount of such proposed
Letter of Credit.
(ii) No U.S. Letter of Credit may be issued if after giving
effect thereto the sum of (A) the aggregate outstanding principal
amount of U.S. Revolving Loans plus (B) the aggregate Letter of Credit
Liabilities relating to U.S. Letters of Credit would exceed the Maximum
U.S. Available Amount. No Canadian Letter of Credit may be issued if
after giving effect thereto the sum of (A) the aggregate outstanding
principal amount of Canadian Revolving Loans plus (B) the aggregate
Letter of Credit Liabilities relating to Canadian Letters of Credit
plus (C) the aggregate Bankers' Acceptance Liabilities would exceed the
Maximum Canadian Available Amount. No U.K. Letter of Credit may be
issued if after giving effect thereto the sum of (A) the aggregate
outstanding principal amount of U.K. Revolving Loans plus (B) the
aggregate Letter of Credit Liabilities relating to U.K. Letters of
Credit would exceed the Maximum U.K. Available Amount. On each day
during the period commencing with the issuance of any Letter of Credit
and until such Letter of Credit shall have expired or been terminated,
the U. S. Commitment, Canadian Commitment or U.K. Commitment, as the
case may be, of each applicable Lender shall be deemed to be utilized
for all purposes hereof, including Section 2.5(a), in an amount equal
to such Lender's
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Commitment Percentage of the amount then available for drawings under
such Letter of Credit (or any unreimbursed drawings under such Letter
of Credit).
(iii) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment thereunder, the applicable Issuer
shall notify the Agents and thereafter the U.S. Agent, the Canadian
Agent or the U.K. Agent, as the case may be, shall promptly notify the
applicable Borrower and each applicable Lender as to the amount to be
paid as a result of such demand and the payment date therefor. If at
any time prior to the earlier of the expiration date of a Letter of
Credit or the Termination Date any applicable Issuer shall have made a
payment to a beneficiary of a Letter of Credit in respect of a drawing
under such Letter of Credit, each applicable Lender will pay to the
U.S. Agent, the Canadian Agent or the U.K. Agent, as the case may be,
immediately upon demand by such Issuer at any time during the period
commencing after such payment until reimbursement thereof in full by
the applicable Borrower, an amount equal to such Lender's Commitment
Percentage of such payment, together with interest on such amount for
each day from the date of demand for such payment (or, if such demand
is made after 11:00 a.m. Houston, Texas time (in the case of a U.S.
Letter of Credit) or 12:00 noon Toronto, Ontario time (in the case of a
Canadian Letter of Credit) or 11:00 a.m. London, United Kingdom time
(in the case of a U.K. Letter of Credit) on such date, from the next
succeeding Business Day) to the date of payment by such Lender of such
amount at a rate of interest per annum equal to (i) in respect of U.S.
Letters of Credit or a U.K. Letter of Credit, the Federal Funds Rate,
(ii) in respect of Canadian Letters of Credit which are denominated in
Dollars, the Base Rate plus two percent (2%) and (iii) in respect of
Canadian Letters of Credit which are denominated in Canadian Dollars,
the CDOR Rate. To the extent that it is ultimately determined that the
applicable Borrower is relieved of its obligation to reimburse the
applicable Issuer because of such Issuer's gross negligence or willful
misconduct in determining that documents received under any applicable
Letter of Credit comply with the terms thereof, the applicable Issuer
shall be obligated to refund to the paying Lenders all amounts paid to
such Issuer to reimburse Issuer for the applicable drawing under such
Letter of Credit.
(iv) U.S. Borrower, the Canadian Borrower or U.K. Borrower, as
the case may be, shall be irrevocably and unconditionally obligated
forthwith to reimburse the appropriate Agent, on the date on which such
Agent notifies U.S. Borrower, the Canadian Borrower or U.K. Borrower,
as the case may be, of the date and amount of any payment by the
applicable Issuer of any drawing under a Letter of Credit, for the
amount paid by such Issuer upon such drawing, without presentment,
demand, protest or other formalities of any kind, all of which are
hereby waived. Such reimbursement may, subject to satisfaction of the
conditions in Sections 5.1 and 5.2 hereof, the limitations on size
contained in Section 2.1 and to the Maximum U.S. Available Amount,
Maximum Canadian Available Amount or Maximum U.K. Available Amount, as
the case may be (after adjustment in the same to reflect the
elimination of the corresponding Letter of Credit Liability), be made
by the borrowing of Loans or, in the case of the Canadian Borrower, by
the issuance, acceptance and purchase of Bankers' Acceptances. The
applicable Agent will pay to each Lender such Lender's Commitment
Percentage of all amounts received from U.S. Borrower, the Canadian
Borrower or the U.K. Borrower, as the case may be, for application in
payment, in whole or in part, of the Reimbursement Obligation in
respect of any Letter of Credit, but only to the
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extent such Lender has made payment to the applicable Agent in respect
of such Letter of Credit pursuant to clause (iii) above.
(v) U.S. Borrower, the Canadian Borrower or the U.K. Borrower,
as the case may be, will pay to the appropriate Agent at the Principal
Office of such Agent for the account of each applicable Lender a letter
of credit fee with respect to each Letter of Credit equal to the
greater of (x) $500 or (y) the Margin Percentage then in effect with
respect to LIBOR Borrowings multiplied by the daily average amount
available for drawings under each Letter of Credit (and computed on the
basis of the actual number of days elapsed in a year composed of 360
days), in each case for the period from and including the date of
issuance of such Letter of Credit to and including the date of
expiration or termination thereof, such fee to be due and payable
quarterly in arrears on each three (3) month anniversary of the
issuance of the applicable Letter of Credit and upon expiration or
termination of the applicable Letter of Credit. The applicable Agent
will pay to each applicable Lender, promptly after receiving any
payment in respect of letter of credit fees referred to in this clause
(v), an amount equal to the product of such Lender's Commitment
Percentage times the amount of such fees. In addition to and cumulative
of the above described fees, U.S. Borrower, the Canadian Borrower or
the U.K. Borrower, as the case may be, shall pay to the appropriate
Agent, for the account of the applicable Issuer, in advance on the date
of the issuance of the applicable Letter of Credit, a fronting fee in
an amount equal to 1/8% of the face amount of the applicable Letter of
Credit (such fronting fee to be retained by the applicable Issuer for
its own account).
(vi) The issuance by the applicable Issuer of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Section 5 hereof, be subject to the conditions precedent (A) that such
Letter of Credit shall be in such form and contain such terms as shall
be reasonably satisfactory to applicable Agent, and (B) that U.S.
Borrower, the Canadian Borrower or the U.K. Borrower, as the case may
be, shall have executed and delivered such Applications and other
instruments and agreements relating to such Letter of Credit as the
applicable Agent shall have reasonably requested and are not
inconsistent with the terms of this Agreement. In the event of a
conflict between the terms of this Agreement and the terms of any
Application, the terms hereof shall control.
(vii) Each Issuer will send to U.S. Borrower, the Canadian
Borrower or the U.K. Borrower, as the case may be, and each applicable
Lender, immediately upon issuance of any Letter of Credit issued by
such Issuer or any amendment thereto, a true and correct copy of such
Letter of Credit or amendment.
(c) Indemnification; Release. U.S. Borrower, the Canadian Borrower or
the U.K. Borrower, as the case may be, hereby indemnifies and holds harmless
each Agent, each Lender and each Issuer from and against any and all claims,
damages, losses, liabilities, costs or expenses which such Agent, such Lender or
such Issuer may incur (or which may be claimed against such Agent, such Lender
or such Issuer by any Person whatsoever), REGARDLESS OF WHETHER CAUSED IN WHOLE
OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, in connection
with the execution and delivery of any Letter of Credit or transfer of or
payment or failure to pay under any Letter of Credit; provided that U.S.
Borrower,
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the Canadian Borrower or the U.K. Borrower, as the case may be, shall not be
required to indemnify or hold harmless any party seeking indemnification for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (i) the willful misconduct or gross negligence of the
party seeking indemnification or exoneration, or (ii) the failure by the party
seeking indemnification to pay under any Letter of Credit after the presentation
to it of a request required to be paid under applicable law. U.S. Borrower, the
Canadian Borrower or the U.K. Borrower, as the case may be, hereby releases,
waives and discharges each Agent, each Lender and each Issuer from any claims,
causes of action, damages, losses, liabilities, reasonable costs or expenses
which may now exist or may hereafter arise, REGARDLESS OF WHETHER CAUSED IN
WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, by reason
of or in connection with the failure of any Agent, any Issuer or any other
Lender to fulfill or comply with its obligations to such Agent, such Lender or
such Issuer, as the case may be, hereunder (but nothing herein contained shall
affect any rights U.S. Borrower, the Canadian Borrower or the U.K. Borrower, as
the case may be, may have against such defaulting party or may have in respect
of gross negligence or willful misconduct). Nothing in this Section 2.2(c) is
intended to limit the obligations of U.S. Borrower, the Canadian Borrower or the
U.K. Borrower, as the case may be, under any other provision of this Agreement.
(d) Additional Costs in Respect of Letters of Credit. Subject to
Sections 11.7 and 11.17 hereof, if as a result of any Regulatory Change there
shall be imposed, modified or deemed applicable any tax (other than any tax
based on or measured by net income), reserve, special deposit or similar
requirement against or with respect to or measured by reference to Letters of
Credit issued or to be issued hereunder or participations in such Letters of
Credit, and the result shall be to increase the cost to any Lender of issuing or
maintaining any Letter of Credit or any participation therein, or materially
reduce any amount receivable by any Lender hereunder in respect of any Letter of
Credit or any participation therein (which increase in cost, or reduction in
amount receivable, shall be the result of such Lender's reasonable allocation of
the aggregate of such increases or reductions resulting from such event), then
such Lender shall notify U.S. Borrower, the Canadian Borrower or the U.K.
Borrower, as the case may be, through the appropriate Agent (which notice shall
be accompanied by a statement setting forth in reasonable detail the basis for
the determination of the amount due), and within 15 Business Days after demand
therefor by such Lender through such Agent, U.S. Borrower, the Canadian Borrower
or the U.K. Borrower, as the case may be, shall pay to such Lender, from time to
time as specified by such Lender, such additional amounts as shall be sufficient
to compensate such Lender for such increased costs or reductions in amount. Such
statement as to such increased costs or reductions in amount incurred by such
Lender, submitted by such Lender to U.S. Borrower, the Canadian Borrower or the
U.K. Borrower, as the case may be, shall be conclusive as to the amount thereof,
absent manifest error, and may be computed using any reasonable averaging and
attribution method. Each Lender will notify U.S. Borrower, the Canadian Borrower
or the U.K. Borrower, as the case may be, through the appropriate Agent of any
event occurring after the date of this Agreement which will entitle such Lender
to compensation pursuant to this Section 2.2(d) as promptly as practicable after
any executive officer of such Lender obtains knowledge thereof and determines to
request such compensation, and (if so requested by U.S. Borrower, the Canadian
Borrower or the U.K. Borrower, as the case may be, through the appropriate
Agent) will designate a different lending office of such Lender for the issuance
or maintenance of Letters of Credit by such Lender or will take such other
action as U.S. Borrower, the Canadian Borrower or the U.K. Borrower, as the case
may be, may reasonably request if such designation or
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action is consistent with the internal policy of such Lender and legal and
regulatory restrictions, can be undertaken at no additional cost, will avoid the
need for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Lender, be disadvantageous to such Lender (provided that no such
U.S. Lender shall have any obligation so to designate a different lending office
which is not located in the United States of America, no such Canadian Lender
shall have any obligation so to designate a different lending office which is
not located in Canada and no such U.K. Lender shall have any obligation so to
designate a different lending office which is not located in the United
Kingdom).
2.3 Certain Provisions Relating to Bankers' Acceptances.
(a) Subject to the terms and conditions hereof, each Canadian Lender
severally agrees to accept and purchase Bankers' Acceptances drawn upon it by
the Canadian Borrower denominated in Canadian Dollars. The Canadian Borrower
shall notify the Canadian Agent by irrevocable written notice (each a "Bankers'
Acceptance Notice") by 12:00 noon (Toronto, Ontario time) two (2) Business Days
prior to the proposed date of any borrowing by way of Bankers' Acceptances. Each
borrowing by way of Bankers' Acceptances shall be in a minimum aggregate face
amount of C$1,000,000.00 and integral multiples of C$100,000.00 in excess
thereof. The face amount of each Bankers' Acceptance shall be C$100,000.00 or
any integral multiple thereof. Each Bankers' Acceptance Notice shall be in the
form of Exhibit G.
(1) Bankers' Acceptances shall be issued and shall mature on a
Business Day. Each Bankers' Acceptance shall have a term of 30, 60, 90
or, if available, 180 days excluding days of grace and shall mature on
or before the Revolving Loan Maturity Date and shall be in form and
substance reasonably satisfactory to each Canadian Lender.
(2) To facilitate the acceptance of Bankers' Acceptances under
this Agreement, the Canadian Borrower shall, upon execution of this
Agreement and from time to time as required, provide to the Canadian
Agent drafts, in form satisfactory to the Canadian Agent, duly executed
and endorsed in blank by the Canadian Borrower in quantities sufficient
for each Canadian Lender to fulfill its obligations hereunder. In
addition, the Canadian Borrower hereby appoints each Canadian Lender as
its attorney to sign and endorse on its behalf, in handwriting or by
facsimile or mechanical signature as and when deemed necessary by such
Canadian Lender, blank forms of Bankers' Acceptances. The Canadian
Borrower recognizes and agrees that all Bankers' Acceptances signed
and/or endorsed on its behalf by a Canadian Lender shall bind the
Canadian Borrower as fully and effectually as if signed in the
handwriting of and duly issued by the proper signing officer of the
Canadian Borrower. Each Canadian Lender is hereby authorized to issue
such Bankers' Acceptances endorsed in blank in such face amounts as may
be determined by such Canadian Lender provided that the aggregate
amount thereof is equal to the aggregate amount of Bankers' Acceptances
required to be accepted by such Canadian Lender. No Canadian Lender
shall be responsible or liable for its failure to accept a Bankers'
Acceptance if the cause of such failure is, in whole or in part, due to
the failure of the Canadian Borrower to provide duly executed and
endorsed drafts to the Canadian Agent on a timely basis nor shall any
Canadian Lender be liable for any damage, loss or other claim arising
by reason of any loss or improper use of any such instrument except
loss or improper use arising by reason of the
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gross negligence or willful misconduct of such Canadian Lender, its
officers, employees, agents or representatives. Each Canadian Lender
shall maintain a record with respect to Bankers' Acceptances (i)
received by it from the Canadian Agent in blank hereunder, (ii) voided
by it for any reason, (iii) accepted by it hereunder, (iv) purchased by
it hereunder and (v) canceled at their respective maturities. Each
Canadian Lender further agrees to retain such records in the manner and
for the statutory periods provided in the various Canadian provincial
or federal statutes and regulations which apply to such Canadian
Lender.
(3) Drafts of the Canadian Borrower to be accepted as Bankers'
Acceptances hereunder shall be duly executed by a duly authorized
officer of the Canadian Borrower or by a Canadian Lender on its behalf
as aforesaid. Notwithstanding that any person whose signature appears
on any Bankers' Acceptance as a signatory for the Canadian Borrower or
for a Canadian Lender as attorney for Canadian Borrower may no longer
be an authorized signatory for the Canadian Borrower or such Canadian
Lender, as the case may be, at the date of issuance of a Bankers'
Acceptance, such signature shall nevertheless be valid and sufficient
for all purposes as if such authority had remained in force at the time
of such issuance and any such Bankers' Acceptance so signed shall be
binding on the Canadian Borrower.
(4) Promptly following receipt of a Bankers' Acceptance
Notice, the Canadian Agent shall so advise the Canadian Lenders and
shall advise each Canadian Lender of the face amount of each Bankers'
Acceptance to be accepted by it and the term thereof. The aggregate
face amount of Bankers' Acceptances to be accepted by a Canadian Lender
shall be determined by the Canadian Agent by reference to the
respective Canadian Commitments of the Canadian Lenders, except that,
if the face amount of a Bankers' Acceptance, which would otherwise be
accepted by a Canadian Lender, would not be C$100,000.00 or an integral
multiple thereof, such face amount shall be increased or reduced by the
Canadian Agent in its sole and unfettered discretion to the nearest
integral multiple of C$100,000.00.
(5) Each Bankers' Acceptance to be accepted by a Canadian
Lender shall be accepted at such Canadian Lender's office shown on the
signature pages hereof or as otherwise designated by such Canadian
Lender from time to time.
(6) On the relevant borrowing date, each Canadian Lender
severally agrees to purchase from the Canadian Borrower, at the face
amount thereof discounted by the Applicable BA Discount Rate, any
Bankers' Acceptance accepted by it and provide to the Canadian Agent,
for the account of the Canadian Borrower, the BA Discount Proceeds in
respect thereof after deducting therefrom the amount of the Acceptance
Fee payable by the Canadian Borrower to such Canadian Lender under
Section 2.3(c) in respect of such Bankers' Acceptance.
(7) Each Canadian Lender may at any time and from time to time
hold, sell, rediscount or otherwise dispose of any or all Bankers'
Acceptances accepted and purchased by it.
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(8) The Canadian Borrower waives presentment for payment and
any other defense to payment of any amounts due to a Canadian Lender in
respect of a Bankers' Acceptance accepted by it pursuant to this
Agreement which might exist solely by reason of such Bankers'
Acceptance being held, at the maturity thereof, by such Canadian Lender
in its own right and the Canadian Borrower agrees not to claim any days
of grace if such Canadian Lender as holder sues the Canadian Borrower
on the Bankers' Acceptances for payment of the amount payable by the
Canadian Borrower thereunder.
(b) With respect to each Bankers' Acceptance, the Canadian Borrower,
prior to the occurrence and continuation of a Default, may give irrevocable
telephone or written notice (or such other method of notification as may be
agreed upon between the Canadian Agent and the Canadian Borrower) to the
Canadian Agent at or before 12:00 noon (Toronto, Ontario time) two (2) Business
Days prior to the maturity date of such Bankers' Acceptance followed by written
confirmation electronically transmitted to the Canadian Agent on the same day,
of the Canadian Borrower's intention to issue one or more Bankers' Acceptance on
such maturity date (each a "Refunding Bankers' Acceptance") to provide for the
payment of such maturing Bankers' Acceptance (it being understood that payments
by the Canadian Borrower and fundings by the Canadian Lenders in respect of each
maturing Bankers' Acceptance and each related Refunding Bankers' Acceptance
shall be made on a net basis reflecting the difference between the face amount
of such maturing Bankers' Acceptance and the BA Discount Proceeds (net of the
applicable Acceptance Fee) of such Refunding Bankers' Acceptance). Any funding
on account of any maturing Bankers' Acceptance must be made at or before 12:00
noon (Toronto, Ontario time) on the maturity date of such Bankers' Acceptance.
If the Canadian Borrower fails to give such notice, then subject to satisfaction
of the conditions in Section 5 hereof and to the Maximum Canadian Available
Amount, the Canadian Borrower shall be irrevocably deemed to have requested and
to have been advanced a Canadian Prime Loan in the face amount of such maturing
Bankers' Acceptance on the maturity date of such Bankers' Acceptance from the
Canadian Lender which accepted such maturing Bankers' Acceptance, which Canadian
Prime Loan shall thereafter bear interest as such in accordance with the
provisions hereof until paid in full.
(c) An Acceptance Fee shall be payable by the Canadian Borrower to each
Canadian Lender in advance (in the manner specified in Section 2.3(a)(6)) in
respect of, and as a condition precedent to the acceptance by such Canadian
Lender of, a Bankers' Acceptance to be accepted by such Canadian Lender
calculated at the rate per annum equal to the Margin Percentage applicable to
LIBOR Borrowings, calculated on the face amount of such Bankers' Acceptance and
computed on the basis of the number of days in the term of such Bankers'
Acceptance and a year of 365 days.
2.4 Terminations, Reductions or Reallocations of Commitments.
(a) Mandatory. On the Termination Date, all U.S. Commitments, Canadian
Commitments and U.K. Commitments shall be terminated in their entirety.
(b) Optional. U.S. Borrower, Canadian Borrower or U.K. Borrower, as the
case may be, shall have the right to terminate or reduce the unused portion of
the U.S. Commitments, the Canadian Commitments or the U.K. Commitments, as the
case may be, at any time or from time to time, provided that (i) U.S. Borrower,
Canadian Borrower or U.K. Borrower, as the case may be,
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shall give notice of each such termination or reduction to the appropriate Agent
as provided in Section 4.3 hereof and (ii) each such partial reduction shall be
in an integral multiple of $2,000,000. Notwithstanding the foregoing, U.S.
Borrower may not reduce the U.S. Commitments below the then outstanding
principal balance of the U.S. Revolving Loan Obligations, Canadian Borrower may
not reduce the Canadian Commitments below the then outstanding principal balance
of the Canadian Obligations and U.K. Borrower may not reduce the U.K.
Commitments below the then outstanding principal balance of the U.K.
Obligations. No termination or reduction of the Commitments pursuant to this
provision may be reinstated without the prior written approval of Agents and the
Lenders.
(c) Reallocations. Any Dual Lender may agree with Borrowers to
reallocate its existing U.S. Commitment and Canadian Commitment or U.K.
Commitment, as the case may be, so long as the sum of such U.S. Commitment and
Canadian Commitment or U.K. Commitment, as the case may be, remains unchanged.
In addition, with the prior written consent of all of the Dual Lenders, any U.S.
Lender may agree with Borrowers to convert a portion of its U.S. Commitment into
a Canadian Commitment or a U.K. Commitment, thereby becoming a Dual Lender, any
Canadian Lender may agree with Borrowers to convert a portion of its Canadian
Commitment into a U.S. Commitment and any U.K. Lender may agree with Borrowers
to convert a portion of its U.K Commitment into a U.S. Commitment, in each case
so long as (i) each Lender continues to be a U.S. Lender with a U.S. Commitment
of at least $1,000,000 and (ii) the sum of such Lender's U.S. Commitment and
Canadian Commitment or U.K. Commitment, as the case may be, remains equal to the
aggregate amount of such Lender's U.S. Commitment and Canadian Commitment or
U.K. Commitment, as the case may be, prior to such reallocation. Borrowers shall
give written notice to the Agents of any reallocation pursuant to this provision
at least ten (10) Business Days prior to the effective date of any such
reallocation. No Lender shall be required to agree to any such reallocation, but
may do so at its option, in its sole discretion. The following conditions
precedent must be satisfied prior to any such reallocation becoming effective:
(1) no Default or Event of Default shall have occurred and be
continuing;
(2) if, as a result of any such reallocation, the aggregate
U.S. Revolving Loan Obligations would exceed the aggregate of all of
the U.S. Commitments, then the U.S. Borrower shall, on the effective
date of such reallocation, repay or prepay U.S. Revolving Loans (or
provide Cover for Letter of Credit Liabilities relating to U.S. Letters
of Credit) in accordance with this Agreement in an aggregate principal
amount such that, after giving effect thereto, the aggregate U.S.
Revolving Loan Obligations shall not exceed the aggregate of all of the
U.S. Commitments;
(3) if, as a result of any such reallocation, the Total
Canadian Exposure would exceed the aggregate of all of the Canadian
Commitments, then the Canadian Borrower shall, on the effective date of
such reallocation, repay or prepay Canadian Revolving Loans (or provide
Cover for Letter of Credit Liabilities relating to Canadian Letters of
Credit or for Bankers' Acceptance Liabilities) in accordance with this
Agreement in an aggregate principal amount such that, after giving
effect thereto, the Total Canadian Exposure shall not exceed the
aggregate of all of the Canadian Commitments;
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(4) if, as a result of any such reallocation, the U.K.
Obligations would exceed the aggregate of all of the U.K. Commitments,
then the U.K. Borrower shall, on the effective date of such
reallocation, repay or prepay U.K. Revolving Loans (or provide Cover
for Letter of Credit Liabilities relating to U.K. Letters of Credit) in
accordance with this Agreement in an aggregate principal amount such
that, after giving effect thereto, the U.K. Obligations shall not
exceed the aggregate of all of the U.K. Commitments;
(5) Borrowers shall have paid any amounts (or shall have
provided Cover) due under Sections 2.9(c) or (d) hereof on the date of
such reallocation;
(6) the Maximum Canadian Available Amount shall be adjusted to
equal the sum of all of the Canadian Commitments after giving effect to
such reallocation, the Maximum U.K. Available Amount shall be adjusted
to equal the sum of all of the U.K. Commitments after giving effect to
such reallocation and the Maximum U.S. Available Amount shall be
adjusted to equal the sum of all of the U.S. Commitments after giving
effect to such reallocation;
(7) participations by the Lenders in the outstanding Letters
of Credit and the Letter of Credit Liabilities and the outstanding
Loans of the Lenders shall be adjusted to give effect to such
reallocation; provided, however, that in lieu of requiring any
prepayment of any Bankers' Acceptances in order to make appropriate
adjustments to give effect to such reallocations, Canadian Borrower
shall be required to provide additional Cover for any applicable
portion of the Bankers' Acceptance Liabilities;
(8) each Lender whose U.S. Commitment, Canadian Commitment or
U.K. Commitment shall be the subject of any reallocation shall have
received from the Borrowers a fee equal to the greater of $3,000.00 or
1/16% of the amount of the increase or decrease, as the case be, in its
Canadian Commitment or U.K. Commitment, as the case may be.
2.5 Commitment Fees.
(a) U.S. Borrower shall pay to U.S. Agent for the account of each U.S.
Lender, Canadian Borrower shall pay to Canadian Agent for the account of each
Canadian Lender and U.K. Borrower shall pay to U.K. Agent for the account of
each U.K. Lender, commitment fees for the Availability Period at a rate per
annum equal to the Commitment Fee Percentage. Such commitment fees shall be
computed (on the basis of the actual number of days elapsed in a year composed
of 360 days) on each day and shall be based on the excess of (x) the aggregate
amount of each Lender's U.S. Commitment, Canadian Commitment or U.K. Commitment,
as the case may be, for such day over (y) the sum of (i) the aggregate unpaid
principal balance (in Dollars) of such Lender's applicable Note or Notes on such
day plus (ii) the aggregate applicable Letter of Credit Liabilities as to such
Lender for such day plus, in the case of Canadian Lenders only, (iii) the
aggregate Bankers' Acceptance Liabilities outstanding on such day. Accrued
commitment fees shall be payable in arrears on the Quarterly Dates prior to the
Termination Date and on the Termination Date, with any Canadian Obligations
converted to Dollars at the Exchange Rate on each such date for the purposes of
each such calculation.
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(b) All past due fees payable under this Section shall bear interest at
the Past Due Rate.
2.6 Several Obligations. The failure of any Lender to make any Loan to
be made by it or to accept and purchase any Bankers' Acceptance required to be
so accepted and purchased by it on the date specified therefor shall not relieve
any other Lender of its obligation to make its Loan or to accept and purchase
its Bankers' Acceptance on such date, but neither any Agent nor any Lender shall
be responsible or liable for the failure of any other Lender to make a Loan or
to accept and purchase any Bankers' Acceptance or to participate in, or
co-issue, any Letter of Credit. Notwithstanding anything contained herein to the
contrary, (i) if a U.S. Lender fails to make a U.S. Revolving Loan as and when
required hereunder, then upon each subsequent event which would otherwise result
in payments of principal being made to the defaulting U.S. Lender, the amount
which would have been paid to the defaulting U.S. Lender shall be divided among
the non-defaulting U.S. Lenders ratably according to their respective Commitment
Percentages until the Obligations of each U.S. Lender (including the defaulting
U.S. Lender) are equal to such U.S. Lender's Commitment Percentage of the total
U.S. Revolving Loan Obligations, (ii) if a Canadian Lender fails to make a
Canadian Revolving Loan or accept and purchase any Bankers' Acceptance as and
when required hereunder, then upon each subsequent event which would otherwise
result in payments of principal being made to the defaulting Canadian Lender,
the amount which would have been paid to the defaulting Canadian Lender shall be
divided among the non-defaulting Canadian Lenders ratably according to their
respective Commitment Percentages until the Obligations of each Canadian Lender
(including the defaulting Canadian Lender) are equal to such Canadian Lender's
Commitment Percentage of the total Canadian Obligations and (iii) if a U.K.
Lender fails to make a U.K. Revolving Loan as and when required hereunder, then
upon each subsequent event which would otherwise result in payments of principal
being made to the defaulting U.K. Lender, the amount which would have been paid
to the defaulting U.K. Lender shall be divided among the non- defaulting U.K.
Lenders ratably according to their respective Commitment Percentages until the
Obligations of each U.K. Lender (including the defaulting U.K. Lender) are equal
to such U.K. Lender's Commitment Percentage of the total U.K. Obligations.
2.7 Notes. The U.S. Revolving Loans made by each U.S. Lender shall be
evidenced by a single U.S. Revolving Note of U.S. Borrower in substantially the
form of Exhibit D hereto payable to the order of such U.S. Lender in a principal
amount equal to the U.S. Commitment of such U.S. Lender, and otherwise duly
completed. The Canadian Revolving Loans made by each Canadian Lender which are
denominated in Dollars shall be evidenced by a single Canadian Revolving Note of
Canadian Borrower in substantially the form of Exhibit C hereto payable to the
order of such Canadian Lender in a principal amount equal to the Canadian
Commitment of such Canadian Lender, and otherwise duly completed. The Canadian
Prime Loans made by each Canadian Lender shall be evidenced by a single Canadian
Dollar Revolving Note of Canadian Borrower in substantially the form of Exhibit
H hereto payable to the order of such Canadian Lender in a principal amount
equal to two times the Canadian Commitment of such Canadian Lender, and
otherwise duly completed. The U.K. Revolving Loans made by each U.K. Lender
shall be evidenced by a single U.K. Revolving Note of U.K. Borrower in
substantially the form of Exhibit L hereto payable to the order of such U.K.
Lender in a principal amount equal to the U.K. Commitment of such U.K. Lender,
and otherwise duly completed. The Term Loans made by each Lender shall be
evidenced by a single Term Note of U.S. Borrower in substantially the form of
Exhibit J hereto payable to the order of such Lender in a principal amount equal
to the sum of the
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outstanding principal balance of the Term Loans made by such Lender, and
otherwise duly completed. The promissory notes described in this Section are
each, together with all renewals, extensions, modifications and replacements
thereof and substitutions therefor, called a "Note" and collectively called the
"Notes". Each Lender is hereby authorized by each Borrower to endorse on the
schedule (or a continuation thereof) that may be attached to each Note of such
Lender, to the extent applicable, the date, amount, type of and the applicable
period of interest for each Loan made by such Lender to the applicable Borrower
hereunder, and the amount of each payment or prepayment of principal of such
Loan received by such Lender, provided, that any failure by such Lender to make
any such endorsement shall not affect the obligations of any Borrower under such
Note or hereunder in respect of such Loan.
2.8 Use of Proceeds. The proceeds of the Loans, of the Letters of
Credit and of the acceptance and purchase of Bankers' Acceptances shall be used
by the Borrowers to refinance existing Borrowed Money Indebtedness of the
Borrowers and for acquisitions (including, for any Loans or Letters of Credit
other than U.K. Loans or U.K. Letters of Credit, the acquisition and related
costs contemplated by the Purchase Agreement) and for other working capital and
general corporate purposes. Neither any Agent nor any Lender shall have any
responsibility as to the use of any proceeds of the Loans or of the acceptance
and purchase of Bankers' Acceptances.
2.9 Currency Fluctuations.
(a) Not later than 1:00 p.m. (Houston, Texas time) on each Calculation
Date, the U.S. Agent shall determine the Exchange Rate applicable to Canadian
Dollars as of such Calculation Date. For purposes of this Section and Section
3.2(b)(4) hereof, the Exchange Rate so determined shall become effective on the
first Business Day immediately following the relevant Calculation Date (a "Reset
Date").
(b) Not later than 4:00 p.m. (Houston, Texas time) on each Reset Date,
the U.S. Agent shall consult with the Canadian Agent and the Agents shall
determine the Total Canadian Exposure, the aggregate U.S. Revolving Loan
Obligations and the aggregate U.K. Obligations.
(c) If, on any Reset Date or on the date of any reallocation of the
U.S. Commitments, the Canadian Commitments and the U.K. Commitments pursuant to
Section 2.4(c) hereof, the sum of the aggregate U.S. Revolving Loan Obligations,
the U.K. Obligations and the Total Canadian Exposure exceeds the aggregate of
all of the U.S. Commitments, the Canadian Commitments and the U.K. Commitments
by five percent (5%) or more, then (i) the Agents shall give notice thereof to
the Lenders and Borrowers and (ii) the Borrowers shall within two (2) Business
Days thereafter, repay or prepay Loans (or provide Cover for Letter of Credit
Liabilities or Bankers' Acceptance Liabilities) in accordance with this
Agreement in an aggregate principal amount sufficient to reduce the sum of the
aggregate U.S. Revolving Loan Obligations, the U.K. Obligations and the Total
Canadian Exposure to the aggregate of all of the U.S. Commitments, the Canadian
Commitments and the U.K. Commitments.
(d) If, on any day prior to the Termination Date, the Total Canadian
Exposure exceeds the aggregate of all of the Canadian Commitments by five
percent (5%) or more, then (i) the Canadian Agent shall give notice thereof to
the Canadian Borrower and the Canadian Lenders and
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(ii) within two (2) Business Days thereafter, the Canadian Borrower shall repay
or prepay Canadian Revolving Loans (or provide Cover for Letter of Credit
Liabilities relating to Canadian Letters of Credit or Bankers' Acceptance
Liabilities) in accordance with this Agreement in an aggregate principal amount
such that, after giving effect thereto, the Total Canadian Exposure shall not
exceed the aggregate of all of the Canadian Commitments.
3. Borrowings, Prepayments and Interest Options.
3.1 Borrowings. The applicable Borrower shall give the applicable Agent
notice of each borrowing to be made hereunder as provided in Section 4.3 hereof
and the applicable Agent shall promptly notify each applicable Lender of such
request. Not later than 2:00 p.m. Houston, Texas time (in the case of U.S.
Revolving Loans which are same day fundings), 11:00 a.m. Houston, Texas time (in
the case of U.S. Revolving Loans which are not same day fundings), 11:00 a.m.
Toronto, Ontario time (in the case of Canadian Revolving Loans which are not
same day fundings and Bankers' Acceptances), 1:00 p.m. Toronto, Ontario time (in
the case of Canadian Revolving Loans which are same day fundings), 11:00 a.m.
London, United Kingdom time (in the case of U.K. Revolving Loans which are not
same day fundings) or 1:00 p.m. London, United Kingdom time (in the case of U.K.
Revolving Loans which are same day fundings) on the date specified for each such
borrowing hereunder, each applicable Lender shall make available the amount of
the Loan, if any, to be made by it on such date and/or the proceeds of the
acceptance and purchase of any Bankers' Acceptances, if any, to be so accepted
and purchased by it on such date to the applicable Agent at its Principal
Office, in immediately available funds, for the account of the applicable
Borrower. Such amounts received by the applicable Agent will be held in an
account maintained by the applicable Borrower with the applicable Agent. The
amounts so received by the applicable Agent shall, subject to the terms and
conditions of this Agreement, be made available to the applicable Borrower by
wiring or otherwise transferring, in immediately available funds, such amount to
an account designated by the applicable Borrower and approved by the applicable
Agent.
3.2 Prepayments.
(a) Optional Prepayments. Except as provided in Section 3.3 hereof,
each Borrower shall have the right to prepay, on any Business Day, in whole or
in part, without the payment of any premium, penalty or fee, any of the
Obligations (other than Obligations relating to Bankers' Acceptances) at any
time or from time to time, provided that the applicable Borrower shall give the
applicable Agent notice of each such prepayment as provided in Section 4.3
hereof. Each optional prepayment on a Term Loan shall be in an amount equal to
an integral multiple of $3,000,000, and each optional prepayment on a Revolving
Loan shall be in an amount equal to or greater than $500,000 (in respect of
Revolving Loans denominated in Dollars) or C$500,000 (in respect of Revolving
Loans denominated in Canadian Dollars). Bankers' Acceptances may not be prepaid.
Such optional prepayments of Term Loans shall be applied ratably (based on
outstanding principal balances) to all Term Notes and shall be applied to
scheduled principal installments in inverse order of their maturities.
(b) Mandatory Prepayments and Cover. Except, in each case, as provided
in Section 3.3 hereof,
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(1) Insurance Proceeds and Condemnation Awards.
(i) Promptly following the receipt thereof by U.S. Borrower or
any of its Subsidiaries (other than a Borrower or a Subsidiary of
Canadian Borrower or U.K. Borrower which is a Foreign Subsidiary),
U.S. Borrower shall deposit or cause to be deposited with U.S. Agent
in an interest bearing account (but without any obligation to
maximize such interest) all of the net cash proceeds of any payment
or award in excess of $1,000,000 made to any such Person under any
policy of Property insurance with respect to any Property owned by
such Person or pursuant to any condemnation award with respect to
any such Property; provided such amounts have not theretofore been
reasonably expended for the restoration or replacement of the asset
in respect of which such payment or award was made. Such amounts
shall be collaterally assigned to U.S. Agent as security for the
U.S. Obligations in a manner reasonably acceptable to U.S. Agent.
Upon delivery to U.S. Agent of written certification by U.S.
Borrower that the applicable Obligor has reasonably expended amounts
or committed in writing to expend amounts for the restoration or
replacement of the asset in respect of which such payment or award
was made, specifying the amount expended or committed, so long as no
Default or Event of Default shall have occurred and be continuing
any such amount deposited with U.S. Agent shall be released by U.S.
Agent to U.S. Borrower; provided, however, that, in the event that
within 180 days of receipt of such payment or award by U.S.
Borrower, to the extent U.S. Borrower shall not have actually spent
or certified to U.S. Agent its intention to expend a substantially
equivalent amount for the restoration or replacement of the asset in
respect of which such payment or award was made or to purchase other
assets that may be productively used in the business of the U.S.
Borrower or the applicable Subsidiary, U.S. Borrower shall make a
prepayment on the Term Loans (using any funds deposited with U.S.
Agent pursuant to this Section 3.2(b)(1) or other funds) in the
amount of the excess of the amount of such payment or award over the
amount of such expenditures and/or commitment on such 180th day.
Such prepayment shall be applied to the Term Notes secured by the
applicable Collateral and shall be applied to scheduled principal
installments in inverse order of their maturities.
(ii) In cases where the amount of the net cash proceeds of any
payment or award is equal to or less than $1,000,000 and no Default
or Event of Default has occurred and is continuing, such proceeds
may be paid to any Obligor, and if received by U.S. Agent shall be
paid by U.S. Agent to U.S. Borrower, for use in paying for
replacements or repairs of or substitutes for the damaged, destroyed
or taken assets or in a manner otherwise consistent with this
Agreement.
(2) Excess Cash Flow. Within fifteen (15) Business Days after
the delivery of the Annual Financial Statements pursuant to Section 7.2
hereof with respect to the fiscal year of U.S. Borrower (commencing
with the fiscal year ending on December 31, 2001), U.S. Borrower shall
make a prepayment on the Term Loans in an amount equal to fifty percent
(50%) of Excess Cash Flow for such fiscal year less (ii) optional
prepayments made on the Term Loans during such fiscal year. Such
prepayment shall be applied ratably to the Term
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Notes (based on outstanding principal balances) and shall be applied to
scheduled principal installments in inverse order of their maturities.
Notwithstanding the foregoing, the obligations to make payments under
this Section 3.2(b)(2) shall cease at such time as the Funded Debt to
EBITDA Ratio shall have been less than 1.25 to 1.00 for two (2)
consecutive fiscal quarters.
(3) U.S. Borrowing Base. U.S. Borrower shall from time to time
on demand by U.S. Agent prepay the U.S. Revolving Loans (or provide
Cover for Letter of Credit Liabilities relating to U.S. Letters of
Credit) in such amounts as shall be necessary so that at all times the
aggregate outstanding amount of all U.S. Revolving Loan Obligations
shall be less than or equal to the Maximum U.S. Available Amount.
(4) Canadian Borrowing Base. Canadian Borrower shall from time
to time on demand by Canadian Agent prepay the Canadian Revolving Loans
(or provide Cover for Letter of Credit Liabilities relating to Canadian
Letters of Credit) in such amounts as shall be necessary so that at all
times the aggregate outstanding amount of all Canadian Obligations
shall be less than or equal to the Maximum Canadian Available Amount
(provided, however, that for purposes of this clause (4), the Exchange
Rate used for conversion of Canadian Dollars into Dollars shall be the
Exchange Rate as of the most recently occurring Calculation Date).
(5) U.K. Borrowing Base. U.K. Borrower shall from time to time
on demand by U.K. Agent prepay the U.K. Revolving Loans (or provide
Cover for Letter of Credit Liabilities relating to U.K. Letters of
Credit) in such amounts as shall be necessary so that at all times the
aggregate outstanding amount of all U.K. Obligations shall be less than
or equal to the Maximum U.K. Available Amount (provided, however, that
for purposes of this clause (5), the Exchange Rate used for conversion
of Pounds or Euros (as the case may be) into Dollars shall be the
Exchange Rate as of the most recently occurring Calculation Date).
(6) Sale of Assets. U.S. Borrower shall make the payments
required by Section 8.4(c) hereof.
(c) Term Loan Amortization. The principal of the Term Notes shall be
due and payable in quarterly installments, each due on a Quarterly Date,
beginning on June 30, 2001, equal to $1,750,000 (in the aggregate for all Term
Notes) and allocated among the Term Loan Lenders pro rata in accordance with the
unpaid principal balances of the Term Notes held by the Term Loan Lenders. On
the Term Loan Maturity Date, the entire unpaid principal balance of each Term
Note and all accrued and unpaid interest on the unpaid principal balance of each
Term Note shall be finally due and payable.
(d) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Loans shall be due and payable on the Interest Payment
Dates.
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(e) Payments and Interest on Reimbursement Obligations. Each Borrower
will pay to the applicable Agent for the account of each applicable Lender the
amount of each Reimbursement Obligation owed by such Borrower. Such payment
shall be due on the date on which the applicable Agent notifies the applicable
Borrower of the date and amount of the applicable payment by an Issuer of any
drawing under a Letter of Credit or on the date of maturity of any Bankers'
Acceptance. The amount of any Reimbursement Obligation may, if the applicable
conditions precedent specified in Sections 5.1 and 5.2 hereof have been
satisfied, be paid with the proceeds of Loans or, in the case of Canadian
Obligations, of the acceptance and purchase or Bankers' Acceptances. Subject to
Section 11.7 hereof, each Borrower will pay to the applicable Agent for the
account of each applicable Lender interest on any Reimbursement Obligation at
(i) at the applicable Base Rate (with respect to Reimbursement Obligations
denominated in Dollars) or at the Canadian Prime Rate (with respect to
Reimbursement Obligations denominated in Canadian Dollars) plus the applicable
Margin Percentage from the date such Reimbursement Obligation arises until the
date five (5) Business Days thereafter and (ii) at the applicable Past Due Rate
thereafter until the same is paid in full.
3.3 Interest Options
(a) Options Available. The outstanding principal balance of the
Canadian Dollar Revolving Notes shall bear interest at the Canadian Prime Rate
and the outstanding principal balance of the other Notes shall bear interest at
the applicable Base Rate; provided, that (1) all past due amounts, both
principal and accrued interest, shall bear interest at the Past Due Rate, and
(2) subject to the provisions hereof, each Borrower shall have the option of
having all or any portion of the principal balances of its Notes (other than the
Canadian Dollar Revolving Notes) from time to time outstanding bear interest at
a Eurodollar Rate. The records of Agents and each of the Lenders with respect to
Interest Options, Interest Periods and the amounts of Loans to which they are
applicable shall be binding and conclusive, absent manifest error. Interest on
the amount of each advance against the Notes shall be computed on the amount of
that advance and from the date it is made. Notwithstanding anything in this
Agreement to the contrary, for the full term of the Notes the interest rate
produced by the aggregate of all sums paid or agreed to be paid to the holders
of the Notes for the use, forbearance or detention of the debt evidenced thereby
(including all interest on the Notes at the Stated Rate plus the Additional
Interest) shall not exceed the Ceiling Rate.
(b) Designation and Conversion. Each Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and subject
to the last sentence of Section 3.3(a) and the provisions of Section 3.3(c),
each Borrower may elect to have a Eurodollar Rate apply or continue to apply to
all or any portion of the principal balance of its Notes (other than the
Canadian Dollar Revolving Notes). Each change in Interest Options shall be a
conversion of the rate of interest applicable to the specified portion of the
Loans, but such conversion shall not change the respective outstanding principal
balances of the applicable Notes. The Interest Options shall be designated or
converted in the manner provided below:
(i) The applicable Borrower shall give the applicable Agent
telephonic notice, promptly confirmed by a Rate Designation
Notice (and the applicable Agent shall promptly inform each
applicable Lender thereof). Each such telephonic and written
notice
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shall specify the amount of the Loan and type (i.e. U.S.
Revolving Loan, Canadian Revolving Loan, U.K. Revolving Loan
or Term Loan) which is the subject of the designation, if any;
the amount of borrowings which are to be converted or for
which an Interest Option is designated; the proposed date for
the designation or conversion and the Interest Period or
Periods, if any, selected by the applicable Borrower. Such
telephonic notice shall be irrevocable and shall be given to
the applicable Agent no later than the applicable Rate
Designation Date.
(ii) No more than four (4) LIBOR Borrowings shall be in effect with
respect to the U.S. Revolving Loans at any time, no more than
four (4) LIBOR Borrowings shall be in effect with respect to
the Canadian Revolving Loans at any time and no more than four
(4) LIBOR Borrowings shall be in effect with respect to the
U.K. Revolving Loans at any time. No more than four (4) LIBOR
Borrowings shall be in effect with respect to the Term Loans
at any time. No single LIBOR Borrowing may include any
combination of any two or more of U.S. Revolving Loans,
Canadian Revolving Loans, U.K. Revolving Loans and Term Loans.
(iii) Each designation or conversion of a LIBOR Borrowing shall
occur on a Business Day.
(iv) Except as provided in Section 3.3(c) hereof, no LIBOR
Borrowing may be converted to a Base Rate Borrowing or another
LIBOR Borrowing on any day other than the last day of the
applicable Interest Period.
(v) Each request for a LIBOR Borrowing shall be in the amount
equal to $500,000 or an integral multiple of $100,000 in
excess thereof.
(vi) Each designation of an Interest Option with respect to the
U.S. Revolving Notes shall apply to all of the U.S. Revolving
Notes ratably in accordance with their respective outstanding
principal balances. Each designation of an Interest Option
with respect to the Canadian Revolving Notes shall apply to
all of the Canadian Revolving Notes ratably in accordance with
their respective outstanding principal balances. Each
designation of an Interest Option with respect to the U.K.
Revolving Notes shall apply to all of the U.K. Revolving Notes
ratably in accordance with their respective outstanding
principal balances. Each designation of an Interest Option
with respect to the Term Notes shall apply to all of the Term
Notes ratably in accordance with their respective outstanding
principal balances. If any Lender assigns an interest in any
of its Notes when any LIBOR Borrowing is outstanding with
respect thereto, then such assignee shall have its ratable
interest in such LIBOR Borrowing.
(vii) The entire outstanding principal balance of the Canadian
Dollar Revolving Notes shall bear interest at the Canadian
Prime Rate.
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(c) Special Provisions Applicable to LIBOR Borrowings.
(i) Options Unlawful. If the adoption of any applicable Legal
Requirement after the Effective Date or any change after the Effective Date in
any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender with any
request or directive (whether or not having the force of law) issued after the
Effective Date by any central bank or other Governmental Authority shall at any
time make it unlawful or impossible for any Lender to permit the establishment
of or to maintain any LIBOR Borrowing, the commitment of such Lender to
establish such LIBOR Borrowing shall forthwith be canceled and the applicable
Borrower shall forthwith, shall on the last day of the Interest Period relating
to any outstanding LIBOR Borrowing (or within such earlier period as may be
required by applicable law) (1) convert the LIBOR Borrowing of such Lender with
respect to which such demand was made to a Base Rate Borrowing; (2) pay all
accrued and unpaid interest to date on the amount so converted; and (3) pay any
amounts required to compensate each Lender for any additional cost or expense
which any Lender may incur as a result of such adoption of or change in such
Legal Requirement or in the interpretation or administration thereof and any
Funding Loss which any Lender may incur as a result of such conversion. If, when
any Agent so notifies any Borrower, such Borrower has given a Rate Designation
Notice specifying a LIBOR Borrowing but the selected Interest Period has not yet
begun, as to the applicable Lender such Rate Designation Notice shall be deemed
to be of no force and effect, as if never made, and the balance of the Loans
made by such Lender specified in such Rate Designation Notice shall bear
interest at the Base Rate until a different available Interest Option shall be
designated in accordance herewith.
(ii) Increased Cost of Borrowings. Subject to Section 11.17, if the
adoption after the Effective Date of any applicable Legal Requirement or any
change after the Effective Date in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive (whether or not having
the force of law) issued after the Effective Date by any central bank or
Governmental Authority shall at any time as a result of any portion of the
principal balances of the Notes being maintained on the basis of a Eurodollar
Rate:
(1) subject any Lender to any Taxes, or any deduction or
withholding for any Taxes, on or from any payment due under
any LIBOR Borrowing or other amount due hereunder, other than
income and franchise taxes of the United States or its
political subdivisions or such other jurisdiction in which the
applicable Lender has its principal office or applicable
lending office; or
(2) change the basis of taxation of payments due from any Borrower
to any Lender under any LIBOR Borrowing (otherwise than by a
change in the rate of taxation of the overall net income of
such Lender); or
(3) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement
included in the calculation of the applicable Eurodollar
Rate), special deposit requirement or similar requirement
(including, but not limited to, state law requirements)
against assets of any Lender, or against deposits with any
Lender, or against loans
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made by any Lender, or against any other funds, obligations or
other Property owned or held by any Lender; or
(4) impose on any Lender any other condition regarding any LIBOR
Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or
reduce the amount of principal or interest received by any Lender, then, within
15 Business Days after demand by any Agent (accompanied by a statement setting
forth in reasonable detail the applicable Lender's basis therefor), the
applicable Borrower shall pay to the applicable Agent additional amounts which
shall compensate each Lender for such increased cost or reduced amount. The
determination by any Lender of the amount of any such increased cost, increased
reserve requirement or reduced amount shall be conclusive and binding, absent
manifest error. Each Borrower shall have the right, if it receives from any
Agent any notice referred to in this paragraph, upon three Business Days' notice
to the applicable Agent (which shall notify each affected Lender), either (i) to
repay in full (but not in part) any borrowing with respect to which such notice
was given, together with any accrued interest thereon, or (ii) to convert the
LIBOR Borrowing which is the subject of the notice to a Base Rate Borrowing;
provided, that any such repayment or conversion shall be accompanied by payment
of (x) the amount required to compensate each Lender for the increased cost or
reduced amount referred to in the preceding paragraph; (y) all accrued and
unpaid interest to date on the amount so repaid or converted, and (z) any
Funding Loss which any Lender may incur as a result of such repayment or
conversion. Each Lender will notify the applicable Borrower through the
applicable Agent of any event occurring after the date of this Agreement which
will entitle such Lender to compensation pursuant to this Section as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation, and (if so requested by the applicable Borrower through the
applicable Agent) will designate a different lending office of such Lender for
the applicable LIBOR Borrowing or will take such other action as the applicable
Borrower may reasonable request if such designation or action is consistent with
the internal policy of such Lender and legal and regulatory restrictions, will
avoid the need for, or reduce the amount of, such compensation and will not, in
the sole opinion of such Lender, be disadvantageous to such Lender.
(iii) Inadequacy of Pricing and Rate Determination. If, for any reason
with respect to any Interest Period, the applicable Agent (or, in the case of
clause 3 below, the applicable Lender) shall have determined (which
determination shall be conclusive and binding upon the applicable Borrower,
absent manifest error) that:
(1) such Agent is unable through its customary general practices
to determine any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable market,
generally, such Agent is not being offered deposits in United
States dollars in such market, for the applicable Interest
Period and in an amount equal to the amount of any applicable
LIBOR Borrowing requested by the applicable Borrower, or
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(3) any applicable Eurodollar Rate will not adequately and fairly
reflect the cost to any Lender of making and maintaining such
LIBOR Borrowing hereunder for any proposed Interest Period,
then the applicable Agent shall give the applicable Borrower notice thereof and
thereupon, (A) any Rate Designation Notice previously given by such Borrower
designating the applicable LIBOR Borrowing which has not commenced as of the
date of such notice from such Agent shall be deemed for all purposes hereof to
be of no force and effect, as if never given, and (B) until the applicable Agent
shall notify such Borrower that the circumstances giving rise to such notice
from such Agent no longer exist, each Rate Designation Notice requesting the
applicable Eurodollar Rate shall be deemed a request for a Base Rate Borrowing,
and any applicable LIBOR Borrowing then outstanding shall be converted, without
any notice to or from the applicable Borrower, upon the termination of the
Interest Period then in effect with respect to it, to a Base Rate Borrowing.
(iv) Funding Losses. Each Borrower shall indemnify each applicable
Lender against and hold each applicable Lender harmless from any Funding Loss
relating to Loans to such Borrower or relating to Bankers' Acceptances requested
by such Borrower. Subject to Section 11.17, this indemnity shall survive the
payment of the Notes. Within 15 Business Days after demand by any Agent
(accompanied by a certificate of the applicable Lender setting forth in
reasonable detail the amount and calculation of the amount claimed as to any
Funding Losses, which shall be conclusive and binding upon the applicable
Borrower, absent manifest error), the applicable Borrower shall pay to such
Agent, for the account of such Lender, the amount of such Funding Losses.
(d) Funding Offices; Adjustments Automatic; Calculation Year. Any
Lender may, if it so elects, fulfill its obligation as to any LIBOR Borrowing by
causing a branch or affiliate of such Lender to make such Loan and may transfer
and carry such Loan at, to or for the account of any branch office or affiliate
of such Lender; provided, that in such event for the purposes of this Agreement
such Loan shall be deemed to have been made by such Lender and the obligation of
the applicable Borrower to repay such Loan shall nevertheless be to such Lender
and shall be deemed held by it for the account of such branch or affiliate.
Without notice to any Borrower or any other Person, each rate required to be
calculated or determined under this Agreement shall automatically fluctuate
upward and downward in accordance with the provisions of this Agreement.
Interest at the Canadian Prime Rate or any applicable Prime Rate shall be
computed on the basis of the actual number of days elapsed in a year consisting
of 365 or 366 days, as the case may be. All other interest required to be
calculated or determined under this Agreement shall be computed on the basis of
the actual number of days elapsed in a year consisting of 360 days, unless the
Ceiling Rate would thereby be exceeded, in which event, to the extent necessary
to avoid exceeding the Ceiling Rate, the applicable interest shall be computed
on the basis of the actual number of days elapsed in the applicable calendar
year in which accrued.
(e) Funding Sources. Notwithstanding any provision of this Agreement to
the contrary, each Lender shall be entitled to fund and maintain its funding of
all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and maintained each LIBOR
Borrowing during each Interest Period through the purchase of deposits having a
maturity
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corresponding to such Interest Period and bearing an interest rate equal to the
Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
any Borrower hereunder, under the Notes and under the other Loan Documents shall
be made, without set-off or counterclaim, in (i) with respect to Bankers'
Acceptance Liabilities and Canadian Prime Loans, Canadian Dollars and (ii) in
all other cases, in Dollars, in immediately available funds, to the applicable
Agent at its Principal Office (or in the case of a successor U.S. Agent, at the
principal office of such successor U.S. Agent in the United States, in the case
of a successor Canadian Agent, at the principal office of such successor
Canadian Agent in Canada and in the case of a successor U.K. Agent, at the
principal office of such successor U.K. Agent in the United Kingdom), not later
than 11:00 a.m. Houston, Texas time (in the case of any payment by the U.S.
Borrower), 12:00 noon Toronto, Ontario time (in the case of any payment by the
Canadian Borrower) or 11:00 a.m. London, United Kingdom time (in the case of any
payment by the U.K. Borrower) on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day).
(b) Each Borrower shall, at the time of making each payment hereunder,
under any Note or under any other Loan Document, specify to the applicable Agent
the Obligations payable by such Borrower hereunder or thereunder to which such
payment is to be applied. Each payment received by any Agent hereunder, under
any Note or under any other Loan Document for the account of a Lender shall be
paid promptly to such Lender, in immediately available funds. If any Agent fails
to send to any Lender the applicable amount by the close of business on the date
any such payment is received by such Agent if such payment is received prior to
11:00 a.m. Houston, Texas time (in the case of any payment to a U.S. Lender) or
12:00 noon Toronto, Ontario time (in the case of any payment to a Canadian
Lender) or 11:00 a.m. London, United Kingdom time (in the case of any payment to
a U.K. Lender) (or on the next succeeding Business Day with respect to payments
which are received after such time), such Agent shall pay to the applicable
Lender interest on such amount from such date at a rate of interest per annum
equal to (i) in respect of Obligations which are denominated in Dollars, the
Federal Funds Rate and (ii) in respect of Canadian Obligations which are
denominated in Canadian Dollars, the CDOR Rate. Borrowers, Lenders and Agents
acknowledge and agree that this provision and each other provision of this
Agreement or any of the other Loan Documents relating to the application of
amounts in payment of the Obligations shall be subject to the provisions of
Section 4.2(d) regarding pro rata application of amounts after an Event of
Default shall have occurred and be continuing.
(c) If the due date of any payment hereunder or under any other Loan
Document falls on a day which is not a Business Day, the due date for such
payments (except as otherwise provided in clause (2) of the definition of
"Interest Period") shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the period of such
extension.
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(d) All payments by any Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for or on account
of any present or future income, stamp, or other taxes, fees, duties,
withholding or other charges of any nature whatsoever imposed by any taxing
authority excluding in the case of each Agent, each Issuer and each Lender taxes
imposed on or measured by its net income or franchise taxes imposed by the
jurisdiction in which it is organized or through which it acts for purposes of
this Agreement (such non-excluded items being hereinafter referred to as
"Taxes"). If as a result of any change in law (or the interpretation thereof)
after the date that the applicable Agent, the applicable Issuer or the
applicable Lender became a party to this Agreement any withholding or deduction
from any payment to be made to, or for the account of, such Person by any
Borrower hereunder or under any other Loan Document is required in respect of
any Taxes pursuant to any applicable law, rule, or regulation, then such
Borrower will (i) pay to the relevant authority the full amount required to be
so withheld or deducted; (ii) to the extent available, promptly forward to the
applicable Agent an official receipt or other documentation reasonably
satisfactory to such Agent evidencing such payment to such authority; and (iii)
pay to the applicable Agent, for the account of each affected Person, such
additional amount or amounts as are necessary to ensure that the net amount
actually received by such Person will equal the full amount such Lender would
have received had no such withholding or deduction been required. Each such
Person shall determine such additional amount or amounts payable to it (which
determination shall, in the absence of manifest error, be conclusive and binding
on each Borrower). If any Agent, any Issuer or any Lender becomes aware that any
such withholding or deduction from any payment to be made by any Borrower
hereunder or under any other Loan Document is required, then such Person shall
promptly notify the applicable Agent and the applicable Borrower thereof stating
the reasons therefor and the additional amount required to be paid under this
Section. Each Lender shall execute and deliver to the applicable Agent and the
applicable Borrower such forms as it may be required to execute and deliver
pursuant to Section 11.13 hereof. To the extent that any such withholding or
deduction results from the failure of a Lender to provide a form required by
Section 11.13 hereof (unless such failure is due to some prohibition under
applicable Legal Requirements), the applicable Borrower shall have no obligation
to pay the additional amount required by clause (iii) above. Anything in this
Section notwithstanding, if any Lender elects to require payment by any Borrower
of any material amount under this Section, the applicable Borrower may, within
60 days after the date of receiving notice thereof and so long as no Default
shall have occurred and be continuing, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination the
applicable Borrower shall (i) if the Agents and each of the other Lenders shall
consent, pay that Lender all principal, interest and fees and other amounts owed
to such Lender through such date of termination or (ii) have arranged for
another financial institution approved by the Agents (such approval not to be
unreasonably withheld or delayed) as of such date, to become a substitute Lender
for all purposes under this Agreement in the manner provided in Section 11.6;
provided further that, prior to substitution for any Lender, the applicable
Borrower shall have given written notice to the Agents of such intention and the
Lenders shall have the option, but no obligation, for a period of 60 days after
receipt of such notice, to increase their U.S. Commitments, Canadian Commitments
or U.K. Commitments, as the case may be, in order to replace the affected Lender
in lieu of such substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing from the Lenders under Section 2.1 hereof shall be made (w)
in the case of Canadian Revolving Loans, ratably from the Canadian Lenders in
accordance with their respective Canadian
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Commitments, (x) in the case of U.K. Revolving Loans, ratably from the U.K.
Lenders in accordance with their respective U.K. Commitments, (y) in the case of
U.S. Revolving Loans, ratably from the U.S. Lenders in accordance with their
respective U.S. Commitments and (z) in the case of Term Loans, ratably from the
Term Loan Lenders in accordance with the amounts set forth opposite their
signature lines hereto under the heading "Term Loans"; (b) each payment of
commitment fees shall be made for the account of the Lenders, and each
termination or reduction of the U.S. Commitments, Canadian Commitments or U.K.
Commitments of the Lenders under Section 2.3 hereof shall be applied, pro rata,
according to the Lenders' respective U.S. Commitments, Canadian Commitments or
U.K. Commitments, as the case may be; (c) each payment by any Borrower of
principal of or interest on the Term Loans, Canadian Revolving Loans, U.K.
Revolving Loans, U.S. Revolving Loans or any Bankers' Acceptance, as the case
may be, prior to the occurrence of an Event of Default (or after the applicable
Event of Default shall have been fully cured or waived) shall be made to the
applicable Agent for the account of the applicable Lenders pro rata in
accordance with the respective unpaid principal amounts of the Term Loans,
Canadian Revolving Loans, U.K. Revolving Loans or U.S. Revolving Loans (as the
case may be) held by or Bankers' Acceptances accepted by such Lenders; (d) each
payment by any Borrower of principal of or interest on the Term Loans, Canadian
Revolving Loans, U.K. Revolving Loans, U.S. Revolving Loans or any Bankers'
Acceptance, as the case may be, while an Event of Default shall have occurred
and be continuing, shall be made to the applicable Agent for the account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
the Obligations held by the Lenders (i.e. such payments shall be shared by all
of the Lenders and not restricted to the holders of U.S. Revolving Notes,
Canadian Revolving Notes, Canadian Dollar Revolving Notes, U.K. Revolving Notes
or Term Notes, or Lenders having accepted Bankers' Acceptances, as the case may
be, regardless of any attempted contrary designation by any Borrower), and (e)
the applicable Lenders (other than the applicable Issuer) shall purchase from
the applicable Issuer participations in each Letter of Credit to the extent of
their respective Commitment Percentages.
4.3 Certain Actions, Notices, Etc. Notices to the applicable Agent of
any termination or reduction of U.S. Commitments, Canadian Commitments or U.K.
Commitments, as the case may be, and of borrowings and optional prepayments of
Loans and requests for issuances of Letters of Credit shall be irrevocable and
shall be effective only if received by the applicable Agent not later than 10:00
a.m. Houston, Texas time (in the case of U.S. Revolving Loans which are same day
fundings), 11:00 a.m. Houston, Texas time (in the case of U.S. Revolving Loans
which are not same day fundings and U.S. Letters of Credit), 12:00 noon Toronto,
Ontario time (in the case of Canadian Revolving Loans which are not same day
fundings, Bankers' Acceptances and Canadian Letters of Credit), 10:00 a.m.
Toronto, Ontario time (in the case of Canadian Revolving Loans which are same
day fundings), 11:00 a.m. London, United Kingdom time (in the case of U.K.
Revolving Loans which are not same day fundings and U.K. Letters of Credit) or
10:00 a.m. London, United Kingdom time (in the case of U.K. Revolving Loans
which are same day fundings) on the number of Business Days prior to the date of
the relevant termination, reduction, borrowing and/or prepayment specified
below:
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Number of Business Days
Prior Notice
-----------------------
Section 2.4(c) Reallocations 10
Termination or Reduction of U.S.
Commitments, Canadian Commitments
or U.K. Commitments 5
U.S. Revolving Loan, Canadian
Revolving Loan or U.K. Revolving
Loan repayment same day
Base Rate Borrowings same day
and Canadian Prime Loans
Letter of Credit issuance 2
Prepayments required pursuant to
Section 3.2(b) same day
Optional prepayment of
Term Loan 5
Selection of a Eurodollar Rate 3 LIBOR
Business Days
Bankers' Acceptances 2
Each such notice of termination or reduction shall specify the amount of the
applicable U.S. Commitment, Canadian Commitment or U.K. Commitment to be
terminated or reduced. Each such notice of borrowing or prepayment shall specify
the amount of the Loans to be borrowed or prepaid and the date of borrowing or
prepayment (which shall be a Business Day). The applicable Agent shall promptly
notify the affected Lenders of the contents of each such notice.
4.4 Non-Receipt of Funds by Any Agent. Unless the applicable Agent
shall have been notified by a Lender or a Borrower (the "Payor") prior to the
date on which such Lender is to make payment to such Agent of the proceeds of a
Loan (or funding of a drawing under a Letter of Credit or reimbursement with
respect to any drawing under a Letter of Credit or funding of a payment under a
Bankers' Acceptance or reimbursement with respect to any payment under a
Bankers' Acceptance) to be made by it hereunder or the applicable Borrower is to
make a payment to such Agent for the account of one or more of the Lenders, as
the case may be (such payment being herein called the "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to such Agent, the applicable Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to),
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make the amount thereof available to the intended recipient on such date and, if
the Payor has not in fact made the Required Payment to such Agent, the recipient
of such payment (or, if such recipient is the beneficiary of a Letter of Credit,
the applicable Borrower and, if such Borrower fails to pay the amount thereof to
the applicable Agent forthwith upon demand, the applicable Lenders ratably in
proportion to their respective Commitment Percentages) shall, on demand, pay to
such Agent the amount made available by such Agent, together with interest
thereon in respect of the period commencing on the date such amount was so made
available by such Agent until the date Agent recovers such amount at a rate per
annum for such period equal to (i) in respect of Obligations which are
denominated in Dollars, the Federal Funds Rate and (ii) in respect of Canadian
Obligations which are denominated in Canadian Dollars, the CDOR Rate.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of any
principal of or interest on any Loan made by it under this Agreement, on any
Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or Lien granted under Section 9.2 hereof),
banker's lien, counterclaim or similar right, or otherwise, it shall promptly
purchase from the other Lenders participations in the Loans made, or
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid Obligations
then due to each of them. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. Each Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any Lender so purchasing a participation in the Loans made, or
Reimbursement Obligations or other Obligations held, by other Lenders may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender were a direct
holder of Loans, Reimbursement Obligations or other Obligations in the amount of
such participation. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Borrower.
5. Conditions Precedent.
5.1 Initial Loans, Letters of Credit and Bankers' Acceptances. The
obligation of each Lender or each Issuer to make its initial Loans or issue or
participate in the initial Letter of Credit hereunder or to accept and purchase
its initial Bankers' Acceptance hereunder (whichever shall first occur) is
subject to the following conditions precedent, each of which shall have been
fulfilled or waived to the satisfaction of the Majority Lenders (or by all of
the Lenders to the extent that such waiver requires unanimous consent under
Section 11.5 hereof):
(a) Authorization and Status. Agents shall have received (i) copies of
the Organizational Documents of each Obligor certified as true and correct by
its secretary, assistant secretary or other equivalent officer, (ii) evidence
reasonably satisfactory to Agents of all action taken by each Obligor
authorizing the execution, delivery and performance of the Loan Documents and
all other documents related to this Agreement to which it is a party (including,
without limitation, a certificate of the
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secretary, assistant secretary or other equivalent officer of each such party
which is a corporation setting forth the resolutions of its Board of Directors
authorizing the transactions contemplated thereby), and (iii) such certificates
as may be appropriate to demonstrate the qualification and good standing of each
Obligor in the jurisdiction of its organization and in each other jurisdiction
where the failure in which to qualify could reasonably be expected to have a
Material Adverse Effect.
(b) Incumbency. Each Obligor shall have delivered to Agents a
certificate in respect of the name and signature of each of the officers (i) who
is authorized to sign on its behalf the applicable Loan Documents to which it is
a party related to any Loan, the issuance of any Letter of Credit or the
acceptance of any Bankers' Acceptance and (ii) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with any Loan, the issuance of any Letter of
Credit or the acceptance of any Bankers' Acceptance. Each Agent and each Lender
may conclusively rely on such certificates until they receive notice in writing
from the applicable Obligor to the contrary.
(c) Notes. Agents shall have received the appropriate Notes of
Borrowers for each Lender, duly completed and executed.
(d) Loan Documents. Each Obligor shall have duly executed and delivered
the Loan Documents to which it is a party (in such number of copies as Agents
shall have requested). Each such Loan Document shall be in substantially the
form furnished to the Lenders prior to their execution of this Agreement,
together with such changes therein as Agents may approve.
(e) Security Matters. All such action as Agents shall have requested to
perfect the Liens created pursuant to the Security Documents which are in effect
as of the Effective Date shall have been taken, including, without limitation,
where applicable, the filing and recording of the Security Documents with the
appropriate Governmental Authorities. Agent shall also have received evidence
satisfactory to it that the Liens created by the Security Documents constitute
first priority Liens, except for the exceptions expressly provided for herein or
therein, including, without limitation, delivery of all applicable stock
certificates (with stock powers executed in blank), Uniform Commercial Code
search reports and other applicable personal property registry reports,
satisfactory title evidence in form and substance acceptable to Agent, and
executed releases of any prior Liens (except as permitted by Section 8.2).
(f) Fees and Expenses. Borrowers shall have paid to Agents all unpaid
fees in the amounts previously agreed upon in writing between any Borrower and
any Agent.
(g) Insurance. Borrowers shall have delivered to Agents certificates of
insurance satisfactory to Agents evidencing the existence of all insurance
required to be maintained by each Obligor by this Agreement and the Security
Documents.
(h) Opinions of Counsel. Agents shall have received such opinions of
counsel to Obligors as Agents shall reasonably request with respect to Obligors
and the Loan Documents.
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(i) Consents. Agents shall have received evidence satisfactory to the
Majority Lenders that all material consents of each Governmental Authority and
of each other Person, if any, reasonably required in connection with (a) the
Loans, Letters of Credit and Bankers' Acceptances and (b) the execution,
delivery and performance of this Agreement and the other Loan Documents have
been satisfactorily obtained.
(j) Key Agreements. Agents shall have received copies of the Key
Agreements, in Proper Form, and, where applicable, shall have received evidence
satisfactory to Agents that the transactions contemplated therein have been
consummated, subject only to the requested funding hereunder. Upon request of
Agents or the Majority Lenders, the copies of any designated Key Agreements
shall be certified as true, correct and complete by the applicable Borrower.
(k) Certain Outstanding Indebtedness. Agents shall have received
evidence satisfactory to Agents that all Liens presently securing the existing
Borrowed Money Indebtedness owing to National Westminster Bank Plc by Axsia
Group Limited or any of its Subsidiaries shall have been fully released in
consideration of receipt by such holder of such Borrowed Money Indebtedness of
cash and Letters of Credit, in specified amounts, supporting such Borrowed Money
Indebtedness (or that such holder shall have agreed to execute such releases
upon receipt by such holder of such cash and Letters of Credit) and that all
rights to further advances under such facility shall have been terminated.
(l) Purchase Agreement. Agents shall have received evidence
satisfactory to the Majority Lenders that, concurrently with the initial advance
made hereunder, the acquisition contemplated by the Purchase Agreement shall be
consummated.
(m) Other Documents. Agents shall have received such other documents
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as Agents may reasonably request.
5.2 All Loans, Letters of Credit and Bankers' Acceptances. The
obligation of each Lender to make any Loan to be made by it hereunder or to
issue or participate in any Letter of Credit or to accept and purchase any
Bankers' Acceptance is subject to (a) the accuracy, in all material respects, on
the date of such Loan or such issuance or such acceptance and purchase of all
representations and warranties of each Obligor contained in this Agreement and
the other Loan Documents; (b) the applicable Agent shall have received the
following, all of which shall be duly executed and in Proper Form: (1) a Request
for Extension of Credit as to the Loan, Letter of Credit or Bankers' Acceptance,
as the case may be, by the time and on the Business Day specified under Section
4.3 hereof, (2) in the case of a Letter of Credit, an Application, and (3) such
other documents as the applicable Agent may reasonably require; (c) prior to the
making of such Loan or the issuance of such Letter of Credit or the acceptance
and purchase of such Bankers' Acceptance, there shall have occurred no event
which could reasonably be expected to have a Material Adverse Effect; (d) no
Default or Event of Default shall have occurred and be continuing, and (e) the
making of such Loan or the issuance of such Letter of Credit or the acceptance
and purchase of such Bankers' Acceptance shall not be illegal or prohibited by
any Legal Requirement. The submission by any Borrower of a Request for Extension
of Credit shall be deemed to be a representation and warranty
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that the conditions precedent to the applicable Loan or Letter of Credit or
Bankers' Acceptance have been satisfied.
6. Representations and Warranties.
To induce Agents, the Issuers and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit and accept and purchase Bankers' Acceptances, U.S. Borrower, Canadian
Borrower and U.K. Borrower each represents and warrants (such representations
and warranties to survive any investigation and the making of the Loans and the
issuance of any Letters of Credit and the acceptance and purchase of any
Bankers' Acceptances) to the Lenders, Issuers and Agents as follows:
6.1 Organization. Each Obligor (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization; (b)
has all necessary power and authority to conduct its business as presently
conducted, and (c) is duly qualified to do business and in good standing in the
jurisdiction of its organization and in all jurisdictions in which the failure
to so qualify could reasonably be expected to have a Material Adverse Effect.
6.2 Financial Statements. Borrowers have furnished to Agents (i)
audited consolidated financial statements (including a balance sheet) as to U.S.
Borrower which fairly present in all material respects, in accordance with GAAP,
the consolidated financial condition and the results of operations of U.S.
Borrower as at the end of the fiscal years ended December 31, 1998 and December
31, 1999, (ii) audited financial statements (including a balance sheet) as to
U.K. Borrower which, to the best knowledge of Borrowers, fairly present in all
material respects, in accordance with United Kingdom generally accepted
accounting principles, the consolidated financial condition and the results of
operations of U.K. Borrower as at the end of the fiscal year ended December 31,
1999, (iii) unaudited consolidating financial statements (including a balance
sheet) as to U.S. Borrower and its Subsidiaries which fairly present in all
material respects, in accordance with GAAP, the consolidating financial
condition and the results of operations of U.S. Borrower and its Subsidiaries,
on a consolidating basis, as at the end of the fiscal years ended December 31,
1998 and December 31, 1999, (iv) unaudited consolidated and consolidating
financial statements (including a balance sheet) as to U.S. Borrower and its
Subsidiaries which fairly present in all material respects, in accordance with
GAAP, the consolidated and consolidating financial condition and the results of
operations of U.S. Borrower and its Subsidiaries as at the end of the fiscal
quarters ended March 31, 2000, June 30, 2000, September 30, 2000 and December
31, 2000 and (v) unaudited financial statements (including a balance sheet) as
to U.K. Borrower which, to the best knowledge of Borrowers, fairly present in
all material respects, in accordance with United Kingdom generally accepted
accounting principles, the consolidated financial condition and the results of
operations of U.K. Borrower as at the end of the fiscal year ended December 31,
2000. No events, conditions or circumstances have occurred from the date that
the financial statements were delivered to Agent through the Effective Date
which would cause said financial statements to be misleading in any material
respect. Except for the Purchase Agreement, this Agreement and the other Loan
Documents, there are no material instruments or liabilities which should be
reflected in such financial statements provided to Agent which are not so
reflected.
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6.3 Enforceable Obligations; Authorization. The Loan Documents to which
the applicable Obligors are parties are legal, valid and binding obligations of
each applicable Obligor, enforceable in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency and other similar laws and
judicial decisions affecting creditors' rights generally and by general
equitable principles. The execution, delivery and performance of the Loan
Documents by the respective Obligors (a) have all been duly authorized by all
necessary action; (b) are within the power and authority of each applicable
Obligor; (c) do not and will not contravene or violate any Legal Requirement
applicable to any applicable Obligor or the Organizational Documents of any
applicable Obligor, the contravention or violation of which could reasonably be
expected to have a Material Adverse Effect; (d) do not and will not result in
the breach of, or constitute a default under, any material agreement or
instrument by which any Obligor or any of its Property may be bound, and (e) do
not and will not result in the creation of any Lien upon any Property of any
Obligor, except in favor of Agents as expressly contemplated herein or therein.
All necessary permits, registrations and consents for such making and
performance have been obtained. Except as otherwise expressly stated in the
Security Documents, the Liens of the Loan Documents will constitute valid and
perfected first and prior Liens on the Property described therein, subject to no
other Liens whatsoever except Permitted Liens.
6.4 Other Debt. No Obligor is in default in the payment of any other
Borrowed Money Indebtedness or under any agreement, mortgage, deed of trust,
security agreement or lease to which it is a party and which default could
reasonably be expected to have a Material Adverse Effect.
6.5 Litigation. There is no litigation or administrative proceeding, to
the knowledge of any executive officer of any Borrower, pending or threatened
against, nor any outstanding judgment, order or decree against, any Obligor
before or by any Governmental Authority which does or could reasonably be
expected to have a Material Adverse Effect. No Obligor is in default with
respect to any judgment, order or decree of any Governmental Authority where
such default could reasonably be expected to have a Material Adverse Effect.
6.6 Title. Each Obligor has good and defensible title to the
Collateral, if any, pledged (or purported to be pledged) by such Obligor
pursuant to the Security Documents, free and clear of all Liens (except
Permitted Liens).
6.7 Taxes. Each Obligor has filed all tax returns required to have been
filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being contested in good faith
or where the failure to make required filings or pay required taxes could not
reasonably be expected to have a Material Adverse Effect.
6.8 Regulations U and X. None of the proceeds of any Loan or proceeds
from the acceptance and purchase of Bankers' Acceptances will be used for the
purpose of purchasing or carrying directly or indirectly any margin stock or for
any other purpose that would constitute this transaction a "purpose credit"
within the meaning of Regulations U and X of the Board of Governors of the
Federal Reserve System, as any of them may be amended from time to time.
6.9 Subsidiaries. As of the Effective Date, U.S. Borrower has no
Subsidiaries other than as set forth on Exhibit K hereto. The percentage of the
issued and outstanding Equity Interests in
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each applicable Subsidiary which is owned by U.S. Borrower or one or more of its
Subsidiaries is set forth on Exhibit K hereto.
6.10 No Untrue or Misleading Statements. No document, instrument or
other writing furnished to the Lenders by or on behalf of any Obligor in
connection with the transactions contemplated in any Loan Document contains any
untrue material statement of fact or omits to state any such fact necessary to
make the representations, warranties and other statements contained herein or in
such other document, instrument or writing not misleading in any material
respect.
6.11 ERISA. With respect to each Plan, each Borrower and each member of
the Controlled Group have fulfilled their obligations, including obligations
under the minimum funding standards of ERISA and the Code and are in compliance
in all material respects with the provisions of ERISA and the Code. No event has
occurred which could result in a liability of any Borrower or any member of the
Controlled Group to the PBGC or a Plan (other than to make contributions in the
ordinary course) that could reasonably be expected to have a Material Adverse
Effect. There have not been any nor are there now existing any events or
conditions that would cause the Lien provided under Section 4068 of ERISA to
attach to any Property of any Borrower or any member of the Controlled Group.
The aggregate Unfunded Liabilities in respect of all Plans as of the date hereof
do not exceed $1,000,000. No "prohibited transaction" has occurred with respect
to any Plan.
6.12 Investment Company Act. No Obligor is an investment company within
the meaning of the Investment Company Act of 1940, as amended, or, directly or
indirectly, controlled by or acting on behalf of any Person which is an
investment company, within the meaning of said Act.
6.13 Public Utility Holding Company Act. No Obligor is an "affiliate"
or a "subsidiary company" of a "public utility company," or a "holding company,"
or an "affiliate" or a "subsidiary company" of a "holding company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
6.14 Solvency. None of U.S. Borrower, Canadian Borrower, U.K. Borrower,
any other Obligor, U.S. Borrower and its Subsidiaries, on a consolidated basis,
Canadian Borrower and its Subsidiaries, on a consolidated basis, or U.K.
Borrower and its Subsidiaries, on a consolidated basis, is "insolvent," as such
term is used and defined in (i) the Bankruptcy Code and (ii) the fraudulent
conveyance statutes of the State of Texas or of any jurisdiction in which any of
the Collateral may be located or unable to pay its debts within the meaning of
Section 123 of the Insolvency Xxx 0000 (England and Wales).
6.15 Fiscal Year. The fiscal year of each Obligor ends on December 31.
6.16 Compliance. Each Obligor is in compliance with all Legal
Requirements applicable to it, except to the extent that the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
6.17 Environmental Matters. Each Obligor has, to the best knowledge of
their respective executive officers, obtained and maintained in effect all
Environmental Permits (or the applicable Person has initiated the necessary
steps to transfer the Environmental Permits into its name or obtain
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such permits), the failure to obtain which could reasonably be expected to have
a Material Adverse Effect. Each Obligor and its Properties, business and
operations have been and are, to the best knowledge of their respective
executive officers, in compliance with all applicable Requirements of
Environmental Law and Environmental Permits the failure to comply with which
could reasonably be expected to have a Material Adverse Effect. Each Obligor and
its Properties, business and operations are not subject to any (A) Environmental
Claims or (B), to the best knowledge of their respective executive officers
(after making reasonable inquiry of the personnel and records of their
respective Corporations), Environmental Liabilities, in either case direct or
contingent, arising from or based upon any act, omission, event, condition or
circumstance occurring or existing on or prior to the date hereof which could
reasonably be expected to have a Material Adverse Effect. None of the officers
of any Obligor has received any notice of any violation or alleged violation of
any Requirements of Environmental Law or Environmental Permit or any
Environmental Claim in connection with its Properties, liabilities, condition
(financial or otherwise), business or operations which could reasonably be
expected to have a Material Adverse Effect. None of U.S. Borrower, Canadian
Borrower or U.K. Borrower knows of any event or condition with respect to
currently enacted Requirements of Environmental Laws presently scheduled to
become effective in the future with respect to any of the Properties of any
Obligor which could reasonably be expected to have a Material Adverse Effect,
for which the applicable Obligor has not made good faith provisions in its
business plan and projections of financial performance.
6.18 Collateral Covered. As of the Effective Date, the Collateral
covered by the Security Documents constitutes substantially all material
personal Property owned by U.S. Borrower and its Subsidiaries (other than
Excluded Subsidiaries and Foreign Subsidiaries which are not Subsidiaries of
Canadian Borrower or U.K. Borrower) and all of the issued and outstanding Equity
Interests in all of the Subsidiaries of U.S. Borrower (other than Excluded
Subsidiaries and Foreign Subsidiaries which are not Subsidiaries of Canadian
Borrower or U.K. Borrower) owned by U.S. Borrower or any of its Subsidiaries
(with the Collateral being allocated among Canadian Obligations, U.K.
Obligations and U.S. Obligations as herein provided).
6.19 Property of Excluded Subsidiaries and Certain Foreign
Subsidiaries. The aggregate value (based on the greater of book or market value)
of the Property owned by Excluded Subsidiaries or by Foreign Subsidiaries of
U.S. Borrower (other than Canadian Borrower, U.K. Borrower or their
Subsidiaries) as of the Effective Date is no greater than $5,000,000.
7. Affirmative Covenants.
U.S. Borrower, Canadian Borrower and U.K. Borrower each covenants and
agrees with Agents and the Lenders that prior to the payment of all Obligations
and the termination of all U.S. Commitments, Canadian Commitments and U.K.
Commitments it will do or cause to be done, and cause each other Obligor (unless
limited by the language of the applicable provision to less than all of the
Obligors) to do or cause to be done, each and all of the following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all times, except
where failure or noncompliance could not reasonably be expected to have a
Material Adverse Effect: (a) pay when due all taxes and governmental charges of
every kind upon it or against its income, profits or Property, unless and only
to the extent that the same shall be contested diligently in good faith and
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adequate reserves in accordance with GAAP have been established therefor; (b) do
all things necessary to preserve its existence, qualifications, rights and
franchises; (c) comply with all applicable Legal Requirements (including without
limitation Requirements of Environmental Law) in respect of the conduct of its
business and the ownership of its Property; and (d) cause its Property to be
protected, maintained and kept in good repair and make all replacements and
additions to such Property as may be reasonably necessary to conduct its
business properly and efficiently.
7.2 Financial Statements and Information. Furnish to Agents and each
Lender each of the following: (a) as soon as available and in any event within
120 days after the end of each applicable fiscal year, beginning with the fiscal
year ending on December 31, 2000, Annual Financial Statements of U.S. Borrower
and, for the fiscal year ended December 31, 2000 only, Annual Financial
Statements for U.K. Borrower; (b) as soon as available and in any event within
45 days after the end of each fiscal quarter of each applicable fiscal year,
Quarterly Financial Statements of U.S. Borrower; (c) concurrently with the
financial statements provided for in Subsections 7.2(a) and (b) hereof, such
schedules, computations and other information, in reasonable detail, as may be
reasonably required by Agents to demonstrate compliance with the covenants set
forth herein or reflecting any non-compliance therewith as of the applicable
date, all certified and signed by a duly authorized officer of U.S. Borrower as
true and correct in all material respects to the best knowledge of such officer
and, commencing with the quarterly financial statement prepared as of March 31,
2001, a compliance certificate ("Compliance Certificate") substantially in the
form of Exhibit F hereto, duly executed by such authorized officer; (d) by March
31 of each fiscal year, U.S. Borrower's annual business plan for the then
current fiscal year (including their proforma balance sheets and income and cash
flow projections for such fiscal year); (e) promptly upon their becoming
publicly available, each financial statement, report, notice or definitive proxy
statements sent by any Obligor to shareholders generally and each regular or
periodic report and each registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof filed by any
Obligor with, or received by any Obligor in connection therewith from, any
securities exchange or the Securities and Exchange Commission or any successor
agency; (f) (1) as of the Effective Date and (2) within 30 days after the end of
each calendar month, a Borrowing Base Certificate as at the Effective Date or
the last day of such calendar month, together with such supporting information
as any Agent may reasonably request; (g) within 30 days after (i) the end of
each calendar quarter or (ii) receipt of a request therefor (which may be given
from time to time) from any Agent, (1) a listing and aging of the Accounts of
(x) U.S. Borrower and its Subsidiaries (other than Foreign Subsidiaries or
Excluded Subsidiaries), (y) the Subsidiaries of Canadian Borrower and (z) the
Subsidiaries of U.K. Borrower which are Foreign Subsidiaries (other than
Excluded Subsidiaries) as of the end of the most recently ended calendar month,
prepared in reasonable detail and containing such other information as any Agent
may reasonably request (including information supporting the progress payments
included in the Eligible Accounts) and (2) a summary of the Inventory of (x)
U.S. Borrower and its Subsidiaries (other than Foreign Subsidiaries or Excluded
Subsidiaries) and (y) the Subsidiaries of Canadian Borrower as of the end of the
most recently ended calendar month, prepared in reasonable detail and containing
such other information as any Agent may reasonably request; (h) from time to
time, at any time upon the request of any Agent, but at the cost of the
applicable Borrower, a report of an independent collateral field examiner
approved by Agents in writing and reasonably acceptable to the applicable
Borrower (which may be, or be affiliated with, any Agent or one of the Lenders)
with respect to the Accounts and Inventory components included in the U.S.
Borrowing Base, the Canadian Borrowing Base and the U.K. Borrowing Base
(provided,
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however, that so long as no Event of Default has occurred and is continuing,
Agents shall not require such a report more than once per calendar year and
during the continuance of an Event of Default, Agents shall not require such a
report more than once per calendar quarter), and (i) such other information
relating to the condition (financial or otherwise), operations, prospects or
business of any Obligor as from time to time may be reasonably requested by any
Agent. Each delivery of a financial statement pursuant to this Section 7.2 shall
constitute a restatement of the representations contained in the last two
sentences of Section 6.2.
7.3 Financial Tests. Have and maintain:
(a) Net Worth - Net Worth of not less than (1) at all times
during the period commencing on the Effective Date through and
including March 31, 2001, an amount equal to $73,252,150 and (2) at all
times during each fiscal quarter thereafter, the minimum Net Worth
required as of the end of the immediately preceding fiscal quarter plus
50% of the net income of U.S. Borrower and its Subsidiaries, on a
consolidated basis (if positive), for the period from December 31, 2000
through the last day of the fiscal quarter ending immediately prior to
the date of such calculation plus 100% of the net proceeds realized
from the issuance of any equity securities by U.S. Borrower during that
period.
(b) Funded Debt to EBITDA Ratio - a Funded Debt to EBITDA
Ratio of not greater than 3.00 to 1.00 at all times during the period
commencing on the Effective Date through and including March 31, 2002;
(2) 2.75 to 1.00 at all times during the period commencing on April 1,
2002 through and including March 31, 2003, and (3) 2.50 to 1.00 at all
times thereafter.
(c) Fixed Charge Coverage Ratio - a Fixed Charge Coverage
Ratio of not less than 1.25 to 1.00 at all times.
(d) Asset Coverage Ratio - an Asset Coverage Ratio of not less
than 1.75 to 1.00 at all times during the period commencing on the
Effective Date through and including December 31, 2001 and (2) 2.00 to
1.00 at all times thereafter.
7.4 Inspection. Permit each Agent and each Lender upon 3 Business Days'
prior notice (unless a Default or an Event of Default has occurred which is
continuing, in which case no prior notice is required) to inspect its Property
in a manner consistent with applicable safety requirements and policies of
insurance, to examine its files, books and records, except classified
governmental material, legally privileged material and material subject to a
confidentiality obligation, and make and take away copies thereof, and to
discuss its affairs with its officers and accountants, all during normal
business hours and at such intervals and to such extent as any Agent may
reasonably desire.
7.5 Further Assurances. Promptly execute and deliver, at the expense of
U.S. Borrower, Canadian Borrower or U.K. Borrower, as the case may be, any and
all other and further instruments which may be reasonably requested by any Agent
to cure any defect in the execution and delivery of any Loan Document in order
to effectuate the transactions contemplated by the Loan Documents, and in order
to grant, preserve, protect and perfect the validity and priority of the Liens
created by the Security Documents.
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7.6 Books and Records. Maintain books of record and account which
permit financial statements to be prepared in accordance with GAAP.
7.7 Insurance. Maintain insurance on its Property with responsible
companies in such amounts, with such deductibles and against such risks as are
usually carried by owners of similar businesses and Properties in the same
general areas in which the applicable Obligor operates or as any Agent may
otherwise reasonably require, and furnish each Agent satisfactory evidence
thereof promptly upon request. These insurance provisions are cumulative of the
insurance provisions of the Security Documents. Each Agent shall be provided
with a certificate showing coverages provided under the policies of insurance
and such policies shall be endorsed to the effect that they will not be canceled
for nonpayment of premium, reduced or affected in any material manner without
thirty (30) days' prior written notice to Agents.
7.8 Notice of Certain Matters. Give Agents written notice of the
following promptly after any executive officer of U.S. Borrower, Canadian
Borrower or U.K. Borrower shall become aware of the same:
(a) the issuance by any court or governmental agency or authority of
any injunction, order or other restraint prohibiting, or having the effect of
prohibiting, the performance of this Agreement, any other Loan Document, or the
making of the Loans or the acceptance and purchase of Bankers' Acceptances or
the initiation of any litigation, or any claim or controversy which would
reasonably be expected to result in the initiation of any litigation, seeking
any such injunction, order or other restraint;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any court or any Governmental
Authority involving claims in excess of $1,000,000 or which could reasonably be
expected to result in a Default hereunder; and
(c) any Event of Default or Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with the respect
thereto.
Borrowers will also notify Agents in writing at least 30 days prior to the date
that any Obligor changes its name or the location of its chief executive office
or principal place of business or the place where it keeps its books and
records. After the Effective Date, Borrowers will notify Agents in writing at
least 45 days prior to any Borrower's or any of their Subsidiaries' (other than
Excluded Subsidiaries and other than Foreign Subsidiaries which are not
Subsidiaries of Canadian Borrower or U.K. Borrower) acquisition of any real
Property or any material personal Property having aggregate fair market value in
excess of $2,500,000, wherever located, other than the Collateral covered by the
Security Documents (such acquisition or ownership being herein called an
"Additional Collateral Event" and the Property so acquired or owned being herein
called "Additional Collateral").
7.9 Capital Adequacy. If any Lender shall have determined that the
adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any applicable law, rule, regulation or
treaty regarding capital adequacy, or any change therein after the Effective
Date, or any change in the interpretation or administration thereof after the
Effective Date
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by any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender with
any request or directive after the Effective Date regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency has or would have the effect of reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder, under the Letters of Credit, the Notes or other Obligations held by
it to a level below that which such Lender could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, upon satisfaction of the conditions precedent
set forth in this Section, after demand by such Lender (with a copy to the
appropriate Agent) as provided below, pay (subject to Sections 11.7 and 11.17
hereof) to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. The certificate of any Lender setting forth such
amount or amounts as shall be necessary to compensate it and the basis thereof
and reasons therefor shall be delivered as soon as practicable to U.S. Borrower,
Canadian Borrower or U.K. Borrower, as the case may be, and shall be conclusive
and binding, absent manifest error. U.S. Borrower, Canadian Borrower or U.K.
Borrower, as the case may be, shall pay the amount shown as due on any such
certificate within fifteen (15) Business Days after the delivery of such
certificate. In preparing such certificate, a Lender may employ such assumptions
and allocations of costs and expenses as it shall in good xxxxx xxxx reasonable
and may use any reasonable averaging and attribution method.
7.10 ERISA Information and Compliance. Promptly furnish to Agents: (i)
immediately upon receipt, a copy of any notice of complete or partial withdrawal
liability under Title IV of ERISA and any notice from the PBGC under Title IV of
ERISA of an intent to terminate or appoint a trustee to administer any Plan,
(ii) if requested by any Agent, promptly after the filing thereof with the
United States Secretary of Labor or the PBGC or the Internal Revenue Service or
any Governmental Authority having jurisdiction under Applicable Canadian Pension
Legislation, copies of each annual and other report or other information return
with respect to each Plan or any trust created thereunder, (iii) immediately
upon becoming aware of the occurrence of any "reportable event," as such term is
defined in Section 4043 of ERISA, for which the disclosure requirements of
Regulation Section 2615.3 promulgated by the PBGC have not been waived, or of
any "prohibited transaction," as such term is defined in Section 4975 of the
Code, in connection with any Plan or any trust created thereunder, a written
notice signed by an authorized officer of the applicable Borrower or the
applicable member of the Controlled Group specifying the nature thereof, what
action the applicable Borrower or the applicable member of the Controlled Group
is taking or proposes to take with respect thereto, and, when known, any action
taken by the PBGC, the Internal Revenue Service, the Department of Labor or any
other applicable Governmental Authority with respect thereto, (iv) promptly
after the filing or receiving thereof by any Borrower or any member of the
Controlled Group of any notice of the institution of any proceedings or other
actions which may result in the termination of any Plan, in whole or in part,
and (v) each request for waiver of the funding standards or extension of the
amortization periods required by Sections 303 and 304 of ERISA or Section 412 of
the Code promptly after the request is submitted by any Borrower or any member
of the Controlled Group to the Secretary of the Treasury, the Department of
Labor, the Internal Revenue Service or any other applicable Governmental
Authority. To the extent required under applicable statutory funding
requirements, each Borrower will fund, or will cause the applicable member of
the Controlled Group to fund, all current service pension liabilities as they
are incurred under the provisions of all Plans from time to time in effect and,
in addition, with respect to Plans governed
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by Applicable Canadian Pension Legislation, all special payments in connection
with solvency deficiencies or going concern Unfunded Liabilities, and comply
with all applicable provisions of ERISA, in each case, except to the extent that
failure to do the same could not reasonably be expected to have a Material
Adverse Effect. Each Borrower covenants that it shall and shall cause each
member of the Controlled Group to (1) make contributions to each Plan in a
timely manner and in an amount sufficient to comply with the contribution
obligations under such Plan and the minimum funding standards requirements of
ERISA; (2) prepare and file in a timely manner all notices and reports required
under the terms of ERISA including but not limited to annual reports; and (3)
pay in a timely manner all required PBGC premiums, in each case, except to the
extent that failure to do the same could not reasonably be expected to have a
Material Adverse Effect.
7.11 Additional Security Documents. As soon as practicable and in any
event within 30 days after an Additional Collateral Event, Borrowers shall (a)
execute and deliver or cause to be executed and delivered Security Documents, in
Proper Form, in favor of the applicable Agent and duly executed by the
applicable Obligor, granting a first-priority Lien (except for Permitted Liens
and except for Liens securing the EXIM Facility covering the "International
Collateral", as such term is defined in the Security Agreements) upon the
applicable Additional Collateral securing all of the Canadian Obligations (in
the case of Canadian Borrower or any of its Subsidiaries), the U.K. Obligations
(in the case of U.K. Borrower or any of its Subsidiaries which are Foreign
Subsidiaries but which are not Excluded Subsidiaries) or the U.S. Obligations
(in the case of U.S. Borrower or any of its Subsidiaries which are not Foreign
Subsidiaries or Excluded Subsidiaries), except as Agents may otherwise agree in
order to limit recording taxes or similar charges based upon the amount secured,
and such other documents (including, without limitation, all items reasonably
required by Agents in connection with the applicable Security Documents
previously executed hereunder, all in Proper Form) as may be reasonably required
by Agents in connection with the execution and delivery of such Security
Documents; (b) deliver or cause to be delivered such other documents or
certificates consistent with the terms of this Agreement and relating to the
transactions contemplated hereby as Agents may reasonably request, and (c) pay
in full all documentary stamps, filing and recording fees, taxes and other fees
and charges payable in connection with the filing and recording of any such
Security Document.
8. Negative Covenants.
U.S. Borrower, Canadian Borrower and U.K. Borrower each covenants and
agrees with Agents and the Lenders that prior to the payment of all Obligations
and the termination of all U.S. Commitments, Canadian Commitments and U.K.
Commitments it will not, and will not suffer or permit any of its Subsidiaries
to, do any of the following:
8.1 Borrowed Money Indebtedness. Create, incur, suffer or permit to
exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Borrowed Money Indebtedness, whether direct,
indirect, absolute, contingent or otherwise, except the following: (a) Borrowed
Money Indebtedness under this Agreement and the other Loan Documents and
Borrowed Money Indebtedness secured by Liens permitted by Section 8.2 hereof;
(b) the liabilities existing on the date of this Agreement and disclosed in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof, and subject to Section 8.10 hereof, all renewals,
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extensions and replacements (but not increases) of any of the foregoing; (c) the
Interest Rate Risk Indebtedness; (d) purchase money indebtedness to acquire
Equipment obtained by U.S. Borrower or any of its Subsidiaries in the ordinary
course of business not exceeding $3,000,000 at any one time outstanding, in the
aggregate for all such indebtedness; (e) Borrowed Money Indebtedness of National
Tank Company and its Subsidiaries under the EXIM Facility; (f) Borrowed Money
Indebtedness created under leases which, in accordance with GAAP have been
recorded or should be recorded as capital leases, in an aggregate amount not to
exceed $2,000,000 at any one time outstanding; (g) pre-existing Borrowed Money
Indebtedness, not to exceed $2,000,000 in the aggregate at any one time
outstanding, secured by Liens upon assets which are acquired after the date
hereof or owing by Persons which become Subsidiaries of U.S. Borrower by
acquisition after the date hereof (provided, however, that no such Borrowed
Money Indebtedness was incurred at the instigation of U.S. Borrower in
contemplation of such acquisition), and (h) without limitation of any other part
of this Section, Borrowed Money Indebtedness of U.S. Borrower or any of its
Subsidiaries created, incurred or assumed after the Effective Date, in an
aggregate amount not to exceed $10,000,000 at any one time outstanding.
8.2 Liens. Create or suffer to exist any Lien upon any of its Property
now owned or hereafter acquired, or acquire any Property upon any conditional
sale or other title retention device or arrangement or any purchase money
security agreement; or in any manner directly or indirectly sell, assign, pledge
or otherwise transfer any of its Accounts or General Intangibles; except: (a)
Liens created pursuant to any Loan Document; (b) Permitted Liens; (c) Liens upon
"International Collateral" (as defined in the EXIM Facility) securing the EXIM
Facility, (d) other Liens securing the EXIM Facility which are subordinate and
inferior to the Liens created pursuant to the Loan Documents, and (e)
pre-existing Liens securing pre-existing Borrowed Money Indebtedness permitted
under Section 8.1(g) hereof covering the applicable acquired asset or covering
Property of the applicable acquired Subsidiary of U.S. Borrower (provided,
however, that no such Liens were created and no such Borrowed Money Indebtedness
was incurred at the instigation of U.S. Borrower in contemplation of such
acquisition).
8.3 Contingent Liabilities. Directly or indirectly guarantee the
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed to Agents in the financial statements delivered on or
prior to the Effective Date pursuant to Section 6.2 hereof (and all renewals,
extensions and replacements--but not increases--of such obligations after the
Effective Date); (c) those liabilities permitted under Sections 8.1 or 8.2
hereof; (d) accounts payable incurred in the ordinary course of business; (e)
performance and warranty guaranties of any Borrower or any of their Subsidiaries
entered into in the ordinary course of business, and (f) other contingent
liabilities not exceeding $2,000,000 at any one time outstanding.
8.4 Mergers, Consolidations and Dispositions of Assets. In any single
transaction or series of transactions, directly or indirectly:
(a) liquidate or dissolve; provided that any Subsidiary of U.S.
Borrower may liquidate, dissolve or take action to wind-up its
operations if (i) U.S. Borrower determines such action to be
in the best interests of U.S. Borrower and its Subsidiaries,
(ii) liquidating
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dividends are paid to U.S. Borrower or to a wholly-owned
Subsidiary of U.S. Borrower, and (iii) U.S. Borrower gives
Agents written notice of such action at least thirty (30) days
prior to taking such action;
(b) be a party to any merger or consolidation unless and so long
as (i) no Default or Event of Default has occurred that is
then continuing, (ii) immediately thereafter and giving effect
thereto, no event will occur and be continuing which
constitutes a Default, (iii) if an Obligor is a party to such
transaction, an Obligor is the surviving Person; (iv) the
surviving Person ratifies and assumes each Loan Document to
which any party to such merger was a party, and (v) Agents are
given at least 30 days' prior written notice of such merger or
consolidation;
(c) sell, convey or lease all or any part of its assets, except
for (i) sales of Inventory in the ordinary course of business,
(ii) sales of other Property in the ordinary course of
business, (iii) sales or other dispositions of Property not
constituting Inventory or other Collateral in the ordinary
course of business; (iv) sales or other dispositions of
Property not constituting Collateral outside the ordinary
course of business; provided the fair market value of all such
Property does not exceed $2,000,000 during any fiscal year;
(v) sales or other dispositions of Property (whether or not
Collateral) expressly permitted by the other terms of this
Agreement or any Loan Document, and (vi) subject to the
Borrowers' compliance with Section 3.2(b), dispositions
occurring as the result of a casualty event or condemnation;
provided, however, that, unless the Majority Lenders shall
have otherwise consented in writing, the net proceeds realized
from such sales or dispositions permitted under subclauses
(iii), (iv) and (v) of this clause (c) must, within ninety
(90) days after the applicable sale or disposition, either (I)
be used to make a prepayment on the Term Loans pro rata based
on their outstanding principal balances (with such payments to
be credited to installments in inverse order of their
maturity) or (II) be reinvested in assets that may be
productively used in the business of U.S. Borrower or the
applicable Subsidiary of U.S. Borrower, or
(d) except for Liens in favor of Agents, pledge, transfer or
otherwise dispose of any Equity Interest in any of U.S.
Borrower's Subsidiaries or any Borrowed Money Indebtedness of
any of U.S. Borrower's Subsidiaries or issue or permit any
Subsidiary of U.S. Borrower to issue any additional Equity
Interest other than stock dividends subject to a Lien in favor
of Agents.
8.5 Redemption, Dividends and Distributions. At any time: (a) redeem,
retire or otherwise acquire, directly or indirectly, any Equity Interest other
than Equity Interests in wholly- owned Subsidiaries or (b) make any
distributions of any Property or cash to the owner of any of the Equity
Interests in any Obligor other than Permitted Dividends and Permitted
Investments.
8.6 Nature of Business. Change the nature of its business or enter into
any business which is substantially different from the business in which it is
presently engaged.
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8.7 Transactions with Related Parties. Enter into any transaction or
agreement with any officer, director or holder of any Equity Interest in any
Obligor (or any Affiliate of any such Person) unless the same is upon terms
substantially similar to those obtainable from wholly unrelated sources (to the
best knowledge of Borrowers, after making reasonable inquiry).
8.8 Loans and Investments. Make any loan, advance, extension of credit
or capital contribution to, or make or, except as permitted by Sections 8.4 or
8.9 hereof, have any Investment in, any Person, or make any commitment to make
any such extension of credit or Investment, except (a) Permitted Investments;
(b) normal and reasonable advances in the ordinary course of business to
officers and employees; (c) accounts receivable and accounts payable arising in
the ordinary course of business; (d) deposits in money market funds investing
exclusively in Permitted Investments; (e) Investments disclosed in the financial
statements delivered pursuant to Section 6.2; (f) routine advances by any
Obligor to another Obligor (or any Subsidiary of an Obligor) in the ordinary
course of business other than Investments, not to exceed $2,000,000 in the
aggregate at any time; (g) Investments by any Obligor in any other Obligor which
is not a Foreign Subsidiary or an Excluded Subsidiary, and (h) other Investments
not to exceed $3,000,000 in the aggregate at any time.
8.9 Subsidiaries. Form, create or acquire any Subsidiary, except that
U.S. Borrower (or any of its Subsidiaries) may form, create or acquire a
wholly-owned Subsidiary so long as (a) immediately thereafter and giving effect
thereto, no event will occur and be continuing which constitutes a Default; (b)
if such Subsidiary is not a Foreign Subsidiary, (1) such Subsidiary shall
execute and deliver to each Agent a Guaranty in substantially the same form as
the Guaranties executed concurrently herewith, (2) such Subsidiary shall execute
and deliver to U.S. Agent such Security Documents as U.S. Agent may reasonably
require in order to create a valid, perfected, first priority Lien upon all of
the real and material personal Property of such Subsidiary (subject to
exceptions set forth in this Agreement) securing the U.S. Obligations and (3)
the applicable owner(s) of the Equity Interests in such Subsidiary shall execute
and deliver to U.S. Agent such Security Documents as U.S. Agent may reasonably
require in order to create a valid, perfected, first priority Lien upon all of
the issued and outstanding Equity Interests in such Subsidiary; (c) if such
Subsidiary is a Subsidiary of Canadian Borrower, (1) such Subsidiary shall
execute and deliver to Canadian Agent a Guaranty in substantially the same form
as the Guaranties executed concurrently herewith in favor of Canadian Agent, (2)
such Subsidiary shall execute and deliver to Canadian Agent such Security
Documents as Canadian Agent may reasonably require in order to create a valid,
perfected, first priority Lien upon all of the real and material personal
Property of such Subsidiary (subject to exceptions set forth in this Agreement)
securing the Canadian Obligations and (3) the applicable owner(s) of the Equity
Interests in such Subsidiary shall execute and deliver to Canadian Agent such
Security Documents as Canadian Agent may reasonably require in order to create a
valid, perfected, first priority Lien upon all of the issued and outstanding
Equity Interests in such Subsidiary securing the Canadian Obligations; (d) if
such Subsidiary is a Subsidiary of U.K. Borrower and is not an Excluded
Subsidiary, (1) such Subsidiary shall execute and deliver to U.K. Agent a
Guaranty in substantially the same form as the Guaranties executed concurrently
herewith in favor of U.K. Agent, (2) such Subsidiary shall execute and deliver
to U.K. Agent such Security Documents as U.K. Agent may reasonably require in
order to create a valid, perfected, first priority Lien upon all of the real and
material personal Property of such Subsidiary (subject to exceptions set forth
in this Agreement) securing the U.K. Obligations and (3) the applicable owner(s)
of the
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Equity Interests in such Subsidiary shall execute and deliver to U.K. Agent such
Security Documents as U.K. Agent may reasonably require in order to create a
valid, perfected, first priority Lien upon all of the issued and outstanding
Equity Interests in such Subsidiary securing the U.K. Obligations, and (f)
Agents are given at least 10 days' prior written notice of such formation,
creation or acquisition. Notwithstanding the foregoing, no Foreign Subsidiary
may form, create or acquire a Subsidiary which is not a Foreign Subsidiary and
Axsia Xxxxx Xxxxx, Inc., a Texas corporation, may not form, create or acquire
any Subsidiary.
8.10 Key Agreements. Terminate or agree to the termination of any Key
Agreement or amend, modify or obtain or grant a waiver of any provision of any
of the Key Agreements if such action could reasonably be expected to have a
Material Adverse Effect (provided that no consent of any Agent or any Bank shall
be required with respect to an amendment of the EXIM Facility which has the sole
effect of increasing the EXIM Facility to an amount not greater than
$12,500,000).
8.11 Organizational Documents. Amend, modify, restate or supplement any
of its Organizational Documents if such action could reasonably be expected to
have a Material Adverse Effect.
8.12 Unfunded Liabilities. Incur any Unfunded Liabilities after the
Effective Date or allow any Unfunded Liabilities in excess of $1,000,000, in the
aggregate, to arise or exist.
8.13 Operating Lease Expenses. Aggregate operating lease expenses
(excluding lease payments under capital leases) shall not exceed, for U.S.
Borrower and its Subsidiaries, in the aggregate in any fiscal year, $5,000,000.
8.14 Sale/Leasebacks. U.S. Borrower will not (and will not permit any
of its Subsidiaries to) enter into any sale/leaseback transactions after the
date hereof without the prior written consent of the Majority Lenders.
8.15 Acquisitions. Acquire any real Property or any material personal
Property after the Effective Date (other than acquisitions of real or personal
Property in the ordinary course of business) with respect to which the aggregate
cash consideration (exclusive of consideration paid in equity and net of
additional equity contributions made to U.S. Borrower by any of its shareholders
which is restricted to be used for the applicable acquisition in a manner
satisfactory to the Majority Lenders) for a single transaction would exceed
$10,000,000.
8.16 Negative Pledges. Except for (a) any of the Loan Documents, (b)
the EXIM Facility, (c) agreements permitted by Section 8.1(f) but only with
respect to the Property subject to the Lien permitted thereby; (d) customary
provisions in leases, licenses, asset sale agreements and other customary
agreements not related to the Borrowed Money Indebtedness and entered into in
the ordinary course of business, and (e) restrictions imposed by agreements
governing Permitted Liens, enter into any agreement or contract which limits or
restricts in any way the granting of Liens by U.S. Borrower or any of its
Subsidiaries securing any of the Obligations.
8.17 Synthetic Repurchases of Equity or Debt. Enter into or be party
to, or make any payment under, any Synthetic Purchase Agreement unless (i) in
the case of any Synthetic Purchase
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Agreement related to any Equity Interest, the payments required to be made by
the Borrower or its Subsidiaries are limited to amounts permitted to be paid
under Section 8.5 hereof and (ii) in the case of any Synthetic Purchase
Agreement, the obligations of the Borrower and its Subsidiaries thereunder are
subordinated to the Obligations on terms satisfactory to the Majority Lenders.
8.18 Property of Excluded Subsidiaries and Certain Foreign
Subsidiaries. Permit the aggregate value (based on the greater of book or market
value) of the Property owned by Excluded Subsidiaries or by Foreign Subsidiaries
of U.S. Borrower (other than Canadian Borrower, U.K. Borrower or their
Subsidiaries) to exceed $5,000,000.
9. Defaults.
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, then either Agent may (and at
the direction of the Majority Lenders, shall) do any or all of the following:
(1) without notice to U.S. Borrower, Canadian Borrower, U.K. Borrower or any
other Person, declare the U.S. Commitments, the Canadian Commitments and the
U.K. Commitments terminated (whereupon the Commitments shall be terminated)
and/or accelerate the Termination Date to a date as early as the date of
termination of the U.S. Commitments, the Canadian Commitments and the U.K.
Commitments; (2) terminate any Letter of Credit allowing for such termination,
by sending a notice of termination as provided therein and require the
applicable Borrower to provide Cover for outstanding Letters of Credit; (3)
declare the principal amount then outstanding of and the unpaid accrued interest
on the Loans and Reimbursement Obligations and all fees and all other amounts
payable hereunder, under the Notes and under the other Loan Documents to be
forthwith due and payable, whereupon such amounts shall be and become
immediately due and payable, without notice (including, without limitation,
notice of acceleration and notice of intent to accelerate), presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by U.S. Borrower, Canadian Borrower and U.K. Borrower; provided that in
the case of the occurrence of an Event of Default with respect to any Obligor
referred to in clause (f), (g) or (h) of this Section 9.1, the U.S. Commitments,
the Canadian Commitments and the U.K. Commitments shall be automatically
terminated and the principal amount then outstanding of and unpaid accrued
interest on the Loans and the Reimbursement Obligations and all fees and all
other amounts payable hereunder, under the Notes and under the other Loan
Documents shall be and become automatically and immediately due and payable,
without notice (including, without limitation, notice of acceleration and notice
of intent to accelerate), presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by U.S. Borrower, Canadian
Borrower and U.K. Borrower, and (4) exercise any or all other rights and
remedies available to any Agent or any Lenders under the Loan Documents, at law
or in equity:
(a) Payments - (i) any Obligor shall fail to make any payment
or required prepayment of any installment of principal on the Loans or
any Reimbursement Obligation payable under the Notes, this Agreement or
the other Loan Documents when due or (ii) any Obligor fails to make any
payment or required payment of interest with respect to the Loans, any
Reimbursement Obligation or any other fee or amount under the Notes,
this Agreement or the other Loan Documents when due and, in the case of
clause (ii) only, such failure to pay continues unremedied for a period
of five days; or
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(b) Other Obligations - any Obligor shall default in the
payment when due of any principal of or interest on any Borrowed Money
Indebtedness having an outstanding principal amount of at least
$3,000,000 in the aggregate (other than the Loans and Reimbursement
Obligations) and such default shall continue beyond any applicable
period of grace and shall give rise to a right on the part of the
holder of such Borrowed Money Indebtedness to accelerate such Borrowed
Money Indebtedness; or any event or condition shall occur which results
in the acceleration of the maturity of any such Borrowed Money
Indebtedness or enables (or, with the giving of notice or lapse of time
or both, would enable) the holder of any such Borrowed Money
Indebtedness or any Person acting on such holder's behalf to accelerate
the maturity thereof and such event or condition shall not be cured
within any applicable period of grace; or
(c) Representations and Warranties -- any representation or
warranty made or deemed made by or on behalf of any Obligor in this
Agreement or any other Loan Document or in any certificate furnished or
made by any Obligor to Agents or the Lenders in connection herewith or
therewith shall prove to have been incorrect, false or misleading in
any material respect as of the date thereof or as of the date as of
which the facts therein set forth were stated or certified or deemed
stated or certified; or
(d) Affirmative Covenants -- (i) default shall be made in the
due observance or performance of any of the covenants or agreements
contained in Section 7.3 hereof or (ii) default is made in the due
observance or performance of any of the other covenants and agreements
contained in Section 7 hereof or any other affirmative covenant of any
Obligor contained in this Agreement or any other Loan Document and such
default continues unremedied for a period of 30 days after (x) notice
thereof is given by any Agent to U.S. Borrower, to Canadian Borrower or
to U.K. Borrower or (y) such default otherwise becomes known to any
executive officer of U.S. Borrower, to Canadian Borrower or to U.K.
Borrwoer, whichever is earlier; or
(e) Negative Covenants - default is made in the due observance
or performance by U.S. Borrower, Canadian Borrower or U.K. Borrower of
any of the other covenants or agreements contained in Section 8 of this
Agreement or of any other negative covenant of any Obligor
contained in this Agreement or any other Loan Document; or
(f) Involuntary Bankruptcy or Receivership Proceedings -- a
receiver, receiver- manager, interim receiver, monitor, conservator,
liquidator or trustee of any Obligor or of any of its Property is
appointed by the order or decree of any court or agency or supervisory
authority having jurisdiction, and such decree or order remains in
effect for more than 90 days; or any Obligor is adjudicated bankrupt or
insolvent; or any of such Person's Property is sequestered by court
order and such order remains in effect for more than 90 days; or a
petition is filed against any Obligor under any state or federal
bankruptcy, reorganization, arrangement, insolvency, readjustment or
debt, dissolution, liquidation or receivership law or any jurisdiction,
whether now or hereafter in effect, and is not dismissed within 90 days
after such filing; or
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(g) Voluntary Petitions or Consents - any Obligor commences a
voluntary case or other proceeding or order seeking liquidation,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or other relief with respect to itself or its
debts or other liabilities under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its Property, or consents to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or fails generally to, or cannot, pay its debts generally as they
become due or takes any corporate action to authorize or effect any of
the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of
Insolvency - any Obligor makes an assignment for the benefit of its
creditors, or admits in writing its insolvency (including any admission
of its inability to pay its debts generally as they become due), or
consents to the appointment of a receiver, receiver-manager, interim
receiver, monitor, trustee, or liquidator of such Obligor or of all or
any substantial part of its Property; or
(i) Undischarged Judgments - a final non-appealable judgment
or judgments for the payment of money exceeding, in the aggregate,
$1,000,000 (exclusive of amounts covered by insurance) is rendered by
any court or other governmental body against any Obligor and such
Obligor does not discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution thereof
within 30 days from the date of entry thereof; or
(j) Security Documents - any Security Document after delivery
thereof, shall cease for any reason, except to the extent permitted by
the terms of this Agreement or such Security Document, to create a
valid and perfected Lien of the first priority (subject to the
Permitted Liens), required thereby on any of the Collateral
individually or in the aggregate having a fair market value in excess
of $1,000,000 purported to be covered thereby and securing that portion
of the Obligations which is therein designated as being secured, or any
Obligor (or any other Person who may have granted or purported to grant
such Lien) will so state in writing or, after the creation thereof as
herein provided, Agents shall cease to have valid, perfected, first
priority Liens upon the issued and outstanding Equity Interests in and
to all Subsidiaries of U.S. Borrower to the extent required by the
terms of this Agreement; or
(k) Change of Control; Ownership of Subsidiaries - (i) any
Person other than U.S. Borrower or its Subsidiaries shall own any
Equity Interest in any Subsidiary of U.S. Borrower (other than
directors' qualifying shares and other than a 15% Equity Interest in
NATCO Japan Co., Inc. currently owned by Persons other than U.S.
Borrower or its Subsidiaries) or any Person other than an Agent shall
acquire any Lien on any Equity Interest in any Subsidiary of U.S.
Borrower (other than a subordinate Lien in favor of the holder(s) of
the EXIM Facility); or (ii) any Change of Control shall occur; or
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(l) Uninsured Loss - any Obligor shall be the subject of any
uninsured or unindemnified casualty losses exceeding, in the aggregate,
$1,000,000 in any fiscal year.
9.2 Right of Setoff. Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from time
to time, without notice to any Obligor (any such notice being expressly waived
by U.S. Borrower, Canadian Borrower, U.K. Borrower and the other Obligors), to
setoff and apply any and all deposits, whether general or special, time or
demand, provisional or final (but excluding the funds held in accounts clearly
designated as escrow or trust accounts held by U.S. Borrower, Canadian Borrower,
U.K. Borrower or any other Obligor for the benefit of Persons which are not
Affiliates of any Obligor), whether or not such setoff results in any loss of
interest or other penalty, and including without limitation all certificates of
deposit, at any time held, and any other funds or Property at any time held, and
other Borrowed Money Indebtedness at any time owing by such Lender to or for the
credit or the account of U.S. Borrower, Canadian Borrower, U.K. Borrower or any
other Obligor against any and all of the Obligations irrespective of whether or
not such Lender or any Agent will have made any demand under this Agreement, the
Notes or any other Loan Document. Should the right of any Lender to realize
funds in any manner set forth hereinabove be challenged and any application of
such funds be reversed, whether by court order or otherwise, the Lenders shall
make restitution or refund to U.S. Borrower, Canadian Borrower or U.K. Borrower
or the applicable other Obligor, as the case may be, pro rata in accordance with
their U.S. Commitments, Canadian Commitments or U.K. Commitments, as the case
may be. Each Lender agrees to promptly notify U.S. Borrower, Canadian Borrower,
U.K. Borrower and Agents after any such setoff and application, provided that
the failure to give such notice will not affect the validity of such setoff and
application. The rights of Agents and the Lenders under this Section are in
addition to other rights and remedies (including without limitation other rights
of setoff) which Agents or the Lenders may have. This Section is subject to the
terms and provisions of Sections 4.5 and 11.7 hereof. Notwithstanding anything
to the contrary contained herein or in any of the other Loan Documents, any
amounts realized under this Section which constitute an asset of any Foreign
Subsidiary shall only be applied to the payment of Canadian Obligations or U.K.
Obligations.
9.3 Collateral Account. U.S. Borrower hereby agrees, in addition to the
provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by any Agent or by
the Majority Lenders (through any Agent), pay to U.S. Agent an amount in
immediately available funds equal to the then aggregate amount available for
drawings under all outstanding U.S. Letters of Credit, which funds shall be held
by U.S. Agent as Cover. Canadian Borrower hereby agrees, in addition to the
provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by any Agent or by
the Majority Lenders (through any Agent), pay to Canadian Agent an amount in
immediately available funds equal to the sum of the then aggregate amount
available for drawings under all outstanding Canadian Letters of Credit plus the
unpaid principal balance of all outstanding Bankers' Acceptances, which funds
shall be held by Canadian Agent as Cover. U.K. Borrower hereby agrees, in
addition to the provisions of Section 9.1 hereof, that upon the occurrence and
during the continuance of any Event of Default, it shall, if requested by any
Agent or by the Majority Lenders (through any Agent), pay to U.K. Agent an
amount in immediately available funds equal to the then aggregate amount
available for drawings under all outstanding U.K. Letters of Credit, which funds
shall be held by U.K. Agent as Cover.
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9.4 Preservation of Security for Letter of Credit Liabilities. In the
event that, following (i) the occurrence of an Event of Default and the exercise
of any rights available to any Agent or any Lender under the Loan Documents, and
(ii) payment in full of the principal amount then outstanding of and the accrued
interest on the Loans and Reimbursement Obligations and fees and all other
amounts payable hereunder and under the Loan Documents and all other amounts
secured by the Security Documents, any Letters of Credit or Bankers' Acceptances
shall remain outstanding and undrawn upon, the applicable Agent shall be
entitled to hold (and each Borrower and each other Obligor hereby grants and
conveys to Agent a security interest in and to) all cash or other Property
("Proceeds of Remedies") realized or arising out of the exercise of any rights
available under the Loan Documents, at law or in equity, including, without
limitation, the proceeds of any foreclosure, as collateral for the payment of
any amounts due or to become due under or in respect of such Letters of Credit
and/or such Bankers' Acceptances. Such Proceeds of Remedies shall be held for
the ratable benefit of the U.S. Lenders, the Canadian Lenders or U.K. Lenders,
as the case may be. The rights, titles, benefits, privileges, duties and
obligations of the applicable Agent with respect thereto shall be governed by
the terms and provisions of this Agreement and, to the extent not inconsistent
with this Agreement, the applicable Security Documents. The applicable Agent
may, but shall have no obligation to, invest any such Proceeds of Remedies in
such manner as such Agent, in the exercise of its sole discretion, deems
appropriate. Such Proceeds of Remedies shall be applied to Reimbursement
Obligations arising in respect of any such Letters of Credit, the payment of any
Lender's obligations under any such Letter of Credit and/or the Obligations
relating to any such Bankers' Acceptance when such Letter of Credit is drawn
upon or such Bankers' Acceptance matures, as the case may be. Nothing in this
Section shall cause or permit an increase in the maximum amount of the
Obligations permitted to be outstanding from time to time under this Agreement.
Notwithstanding anything to the contrary contained herein or in any of the other
Loan Documents, any amounts realized under this Section which constitute an
asset of any Foreign Subsidiary shall only be applied to the payment of Canadian
Obligations or U.K. Obligations.
9.5 Currency Conversion After Maturity. At any time following the
occurrence of an Event of Default and the acceleration of the maturity of the
Obligations owed to the Canadian Lenders hereunder, the Canadian Lenders shall
be entitled to convert, with two (2) Business Days' prior notice to Canadian
Borrower, any and all or any part of the then unpaid and outstanding LIBOR
Borrowings and Base Rate Borrowings of the Canadian Borrower to Canadian Prime
Loans. Any such conversion shall be calculated so that the resulting Canadian
Prime Loans shall be the equivalent on the date of conversion of the amount of
Dollars so converted. Any accrued and unpaid interest denominated in Dollars at
the time of any such conversion shall be similarly converted to Canadian
Dollars, and such Canadian Prime Loans and accrued and unpaid interest thereon
shall thereafter bear interest in accordance with the terms hereof.
9.6 Remedies Cumulative. No remedy, right or power conferred upon any
Agent or any Lender is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
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10. Agents.
10.1 Appointment, Powers and Immunities. Each U.S. Lender hereby
irrevocably appoints and authorizes U.S. Agent to act as its agent hereunder,
under the U.S. Letters of Credit and under the other Loan Documents with such
powers as are specifically delegated to U.S. Agent by the terms hereof and
thereof, together with such other powers as are reasonably incidental thereto.
Each Canadian Lender hereby irrevocably appoints and authorizes Canadian Agent
to act as its agent hereunder, under the Canadian Letters of Credit and under
the other Loan Documents with such powers as are specifically delegated to
Canadian Agent by the terms hereof and thereof, together with such other powers
as are reasonably incidental thereto. Each U.K. Lender hereby irrevocably
appoints and authorizes U.K. Agent to act as its agent hereunder, under the U.K.
Letters of Credit and under the other Loan Documents with such powers as are
specifically delegated to U.K. Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. Any Loan Documents
executed in favor of any Agent shall be held by such Agent for the ratable
benefit of the applicable Lenders. None of the Agents ("Agents" as used in this
Section 10 shall include reference to their Affiliates and their own and their
Affiliates' respective officers, shareholders, directors, employees and agents)
(a) shall have any duties or responsibilities except those expressly set forth
in this Agreement, the Letters of Credit, and the other Loan Documents, and
shall not by reason of this Agreement or any other Loan Document be a trustee or
fiduciary for any Lender; (b) shall be responsible to any Lender for any
recitals, statements, representations or warranties contained in this Agreement,
the Letters of Credit or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement, the Letters of Credit or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability, execution, filing,
registration, collectibility, recording, perfection, existence or sufficiency of
this Agreement, the Letters of Credit, or any other Loan Document or any other
document referred to or provided for herein or therein or any Property covered
thereby or for any failure by any Obligor or any other Person to perform any of
its obligations hereunder or thereunder, or shall have any duty to inquire into
or pass upon any of the foregoing matters; (c) shall be required to initiate or
conduct any litigation or collection proceedings hereunder or under the Letters
of Credit or any other Loan Document except to the extent requested and
adequately indemnified by the Majority Lenders; (d) shall be responsible for any
mistake of law or fact or any action taken or omitted to be taken by it
hereunder or under the Letters or Credit or any other Loan Document or any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, including, without limitation, pursuant to its
own negligence, except for its own gross negligence or willful misconduct; (e)
shall be bound by or obliged to recognize any agreement among or between any
Borrower and any Lender to which such Agent is not a party, regardless of
whether such Agent has knowledge of the existence of any such agreement or the
terms and provisions thereof; (f) shall be charged with notice or knowledge of
any fact or information not herein set out or provided to such Agent in
accordance with the terms of this Agreement or any other Loan Document; (g)
shall be responsible for any delay, error, omission or default of any mail,
telegraph, cable or wireless agency or operator, and (h) shall be responsible
for the acts or edicts of any Governmental Authority. Any Agent may employ
agents and attorneys-in-fact and none of the Agents shall be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. Without in any way limiting any of the foregoing, each
Lender acknowledges that none of the Agents (nor any Issuer) shall have greater
responsibility in the operation of the Letters of Credit than is specified in
the Uniform Customs and
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Practice for Documentary Credits (1993 Revision, International Chamber of
Commerce Publication No. 500). In any foreclosure proceeding concerning any
Collateral, each holder of an Obligation if bidding for its own account or for
its own account and the accounts of other Lenders is prohibited from including
in the amount of its bid an amount to be applied as a credit against the
Obligations held by it or the Obligations held by the other Lenders; instead,
such holder must bid in cash only. However, in any such foreclosure proceeding,
(i) U.S. Agent may (but shall not be obligated to) submit a bid for all U.S.
Lenders (including itself) in the form of a credit against the U.S. Obligations,
and U.S. Agent or its designee may (but shall not be obligated to) accept title
to such collateral for and on behalf of all U.S. Lenders, (ii) Canadian Agent
may (but shall not be obligated to) submit a bid for all Canadian Lenders
(including itself) in the form of a credit against the Canadian Obligations, and
Canadian Agent or its designee may (but shall not be obligated to) accept title
to such collateral for and on behalf of all Canadian Lenders and (iii) U.K.
Agent may (but shall not be obligated to) submit a bid for all U.K. Lenders
(including itself) in the form of a credit against the U.K. Obligations, and
U.K. Agent or its designee may (but shall not be obligated to) accept title to
such collateral for and on behalf of all U.K. Lenders.
10.2 Reliance. Each Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (which may be counsel for any
Borrower), independent accountants and other experts selected by such Agent.
None of the Agents shall be required in any way to determine the identity or
authority of any Person delivering or executing the same. As to any matters not
expressly provided for by this Agreement, the Letters of Credit, or any other
Loan Document, each Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with instructions
of the Majority Lenders, and any action taken or failure to act by U.S. Agent
pursuant thereto shall be binding on all of the U.S. Lenders, any action taken
or failure to act by Canadian Agent pursuant thereto shall be binding on all of
the Canadian Lenders and any action taken or failure to act by U.K. Agent
pursuant thereto shall be binding on all of the U.K. Lenders. Pursuant to
instructions of the Majority Lenders, the Agents shall have the authority to
execute releases of the Security Documents on behalf of the Lenders without the
joinder of any Lender. If any order, writ, judgment or decree shall be made or
entered by any court affecting the rights, duties and obligations of any Agent
under this Agreement or any other Loan Document, then and in any of such events
such Agent is authorized, in its sole discretion, to rely upon and comply with
such order, writ, judgment or decree which it is advised by legal counsel of its
own choosing is binding upon it under the terms of this Agreement, the relevant
Loan Document or otherwise; and if such Agent complies with any such order,
writ, judgment or decree, then it shall not be liable to any Lender or to any
other Person by reason of such compliance even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
10.3 Defaults. None of the Agents shall be deemed to have knowledge of
the occurrence of a Default (other than the non-payment of principal of or
interest on Loans or Reimbursement Obligations) unless such Agent has received
notice from a Lender or a Borrower specifying such Default and stating that such
notice is a "Notice of Default." In the event that any Agent receives such a
Notice of Default, such Agent shall give prompt notice thereof to the Lenders
(and shall give each Lender prompt notice of each such non-payment). Each Agent
shall (subject to Section 10.7 hereof) take such action with respect to such
Notice of Default as shall be directed by the Majority Lenders and within its
rights under the Loan Documents and at law or in equity, provided that,
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unless and until an Agent shall have received such directions, such Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, permitted hereby with respect to such Notice of Default as it shall deem
advisable in the best interests of the Lenders and within its rights under the
Loan Documents, at law or in equity.
10.4 Material Written Notices. In the event that any Agent receives any
written notice of a material nature from any Borrower or any Obligor under the
Loan Documents, such Agent shall promptly inform each of the Lenders thereof.
10.5 Rights as a Lender. With respect to their U.S. Commitments,
Canadian Commitments or U.K. Commitments, as the case may be, and the
Obligations, each of Chase, RBC and Chase U.K., in its capacity as a Lender
hereunder, shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting in its agency capacity,
and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include each Agent in its individual capacity. Each Agent may
(without having to account therefor to any Lender) accept deposits from, lend
money to and generally engage in any kind of banking, trust, letter of credit,
agency or other business with any Borrower (and any of their Affiliates) as if
it were not acting as an Agent, and each Agent may accept fees and other
consideration from any Borrower (in addition to the fees heretofore agreed to
between any Borrower and any Agent) for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
10.6 Indemnification. The Canadian Lenders, the U.S. Lenders and U.K.
Lenders, respectively, agree to indemnify Canadian Agent, U.S. Agent and U.K.
Agent, respectively (to the extent not reimbursed under Section 2.2(c), Section
11.3 or Section 11.4 hereof, but without limiting the obligations of any
Borrower under said Sections 2.2(c), 11.3 and 11.4), ratably in accordance with
the sum of the applicable Lenders' respective U.S. Commitments, Canadian
Commitments, U.K. Commitments and Term Loans, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever, REGARDLESS OF
WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY INDEMNIFIED PARTIES,
which may be imposed on, incurred by or asserted against the applicable Agent in
any way relating to or arising out of this Agreement, the Letters of Credit or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses which any Borrower is obligated to
pay under Sections 2.2(c), 11.3 and 11.4 hereof, interest, penalties, attorneys'
fees and amounts paid in settlement, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified. The obligations
of the Lenders under this Section 10.6 shall survive the termination of this
Agreement and the repayment of the Obligations.
10.7 Non-Reliance on Agents and Other Lenders. Each Lender agrees that
it has received current financial information with respect to each Borrower and
each other Obligor and that it has, independently and without reliance on any
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis of each Borrower and each other
Obligor and decision to enter into this Agreement and that it will,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information
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as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. None of the Agents shall be required to keep itself
informed as to the performance or observance by any Obligor of this Agreement,
the Letters of Credit or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of any Obligor. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by an Agent
hereunder, under the Letters of Credit or the other Loan Documents, none of the
Agents shall have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of any Obligor (or any of their affiliates) which may come into the
possession of any Agent.
10.8 Failure to Act. Except for action expressly required of an Agent
hereunder, under the Letters of Credit or under the other Loan Documents, each
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction by the Lenders of their indemnification obligations under Section
10.6 hereof against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
10.9 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor U.S. Agent, Canadian Agent or U.K. Agent, as the case
may be, as provided below, U.S. Agent, Canadian Agent and U.K. Agent,
respectively, may resign at any time by giving notice thereof to the U.S.
Lenders, the Canadian Lenders and U.K. Lenders, respectively, and to U.S.
Borrower, Canadian Borrower and U.K. Borrower, respectively. Any Agent may be
removed at any time with or without cause by the Majority Lenders; provided,
that such Agent shall continue as U.S. Agent, Canadian Agent or U.K. Agent, as
the case may be, until such time as any successor shall have accepted
appointment hereunder as U.S. Agent, Canadian Agent or U.K. Agent, as the case
may be. Upon any such resignation or removal, (i) the Majority Lenders without
the consent of any Borrower shall have the right to appoint a successor U.S.
Agent, Canadian Agent or U.K. Agent, as the case may be, so long as such
successor U.S. Agent , Canadian Agent or U.K. Agent, as the case may be, is also
a Lender at the time of such appointment and (ii) the Majority Lenders shall
have the right to appoint a successor U.S. Agent, Canadian Agent or U.K. Agent,
as the case may be, that is not a Lender at the time of such appointment so long
as Borrowers consent to such appointment (which consent shall not be
unreasonably withheld). If no successor U.S. Agent, Canadian Agent or U.K.
Agent, as the case may be, shall have been so appointed by the Majority Lenders
and accepted such appointment within 30 days after the retiring U.S. Agent's,
Canadian Agent's or U.K. Agent's, as the case may be, giving of notice of
resignation or the Majority Lenders' removal of the retiring U.S. Agent,
Canadian Agent or U.K. Agent, as the case may be, then the retiring Agent may,
on behalf of the applicable Lenders, appoint a successor U.S. Agent, Canadian
Agent or U.K. Agent, as the case may be, without the necessity of any consent on
the part of any Borrower or any Lender. Any successor U.S. Agent shall be a bank
which has an office in the United States and a combined capital and surplus of
at least $250,000,000, any successor Canadian Agent shall be a bank which has an
office in Canada and a combined capital and surplus of at least C$250,000,000
and any successor U.K. Agent shall be a bank which has an office in the United
Kingdom and a combined capital and surplus of at least (pound)100,000,000. Upon
the acceptance of any appointment as U.S. Agent, Canadian Agent or U.K. Agent,
as the case may be, hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be discharged from
its duties and obligations hereunder and under any other Loan Documents. Such
successor Agent shall promptly specify by
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notice to Borrowers its Principal Office referred to in Section 3.1 and Section
4 hereof. After any retiring Agent's resignation or removal hereunder as an
Agent, the provisions of this Section 10 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
10.10 No Partnership. Neither the execution and delivery of this
Agreement nor any of the other Loan Documents nor any interest the Lenders,
Agents or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
any Agent. The relationship between the Lenders, on the one hand, and any Agent,
on the other, is and shall be that of principals and agent only, and nothing in
this Agreement or any of the other Loan Documents shall be construed to
constitute any Agent as trustee or other fiduciary for any Lender or to impose
on any Agent any duty, responsibility or obligation other than those expressly
provided for herein and therein.
10.11 Authority of Agent. Each Lender acknowledges that the rights and
responsibilities of each Agent under this Agreement and the Loan Documents with
respect to any action taken by such Agent or the exercise or non-exercise by any
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement and/or the other Loan
Documents shall, as between such Agent and the Lenders, be governed by this
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between such Agent and the Obligors, such Agent
shall be conclusively presumed to be acting as agent for the applicable Lenders
with full and valid authority so to act or refrain from acting; and each Obligor
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
10.12 Syndications Agent; Documentation Agent. Bank One, NA (Main
Office Chicago Illinois), in its capacity as Syndications Agent, shall have no
rights, powers, duties, obligations or liabilities under this Agreement or any
of the other Loan Documents, but to the extent that for any reason any Person
makes a claim against Bank One, NA (Main Office Chicago Illinois) in its
capacity as Syndications Agent and not as a Lender the indemnification
provisions in Sections 10.6 and 11.4 shall apply. Xxxxx Fargo Bank Texas,
National Association, in its capacity as Documentation Agent, shall have no
rights, powers, duties, obligations or liabilities under this Agreement or any
of the other Loan Documents, but to the extent that for any reason any Person
makes a claim against Xxxxx Fargo Bank Texas, National Association in its
capacity as Documentation Agent and not as a Lender the indemnification
provisions in Sections 10.6 and 11.4 shall apply.
11. Miscellaneous.
11.1 Waiver. No waiver of any Default or Event of Default shall be a
waiver of any other Default or Event of Default. No failure on the part of any
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law or in equity.
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11.2 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telegraph, telecopy (confirmed
by mail), cable or other writing and telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof (or provided for in an Assignment and
Acceptance); or, as to any party hereto, at such other address as shall be
designated by such party in a notice (given in accordance with this Section) (i)
as to any Borrower, to Agents, (ii) as to U.S. Agent, to U.S. Borrower and to
each U.S. Lender, (iii) as to Canadian Agent, to Canadian Borrower and to each
Canadian Lender, (iv) as to U.K. Agent, to U.K. Borrower and to each U.K.
Lender, (v) as to any U.S. Lender, to U.S. Borrower and Agents, (vi) as to any
Canadian Lender, to Canadian Borrower and Agents and (vii) as to any U.K.
Lender, to U.K. Borrower and Agents. Except as otherwise provided in this
Agreement, all such notices or communications shall be deemed to have been duly
given when (a) transmitted by telecopier or delivered to the telegraph or cable
office, (b) personally delivered (c) one Business Day after deposit with an
overnight mail or delivery service, postage prepaid or (d) three Business Days'
after deposit in a receptacle maintained by the United States Postal Service or
Canada Post or the official postal service of the United Kingdom, as the case
may be, postage prepaid, registered or certified mail, return receipt requested,
in each case given or addressed as aforesaid.
11.3 Expenses, Etc. Whether or not any Loan is ever made or any
Bankers' Acceptances ever accepted and purchased or any Letter of Credit ever
issued, Borrowers shall pay or reimburse within 10 Business Days after written
demand (a) any Agent for paying the reasonable fees and expenses of legal
counsel to such Agent, together with the reasonable fees and expenses of each
local counsel to such Agent, in connection with the preparation, negotiation,
execution and delivery of this Agreement (including the exhibits and schedules
hereto), the Security Documents and the other Loan Documents and the making of
the Loans and the acceptance and purchase of Bankers' Acceptances and the
issuance of Letters of Credit hereunder, and any modification, supplement or
waiver of any of the terms of this Agreement, the Letters of Credit or any other
Loan Document; (b) any Agent for any reasonable and customary search fees,
collateral audit fees, appraisal fees, survey fees, environmental study fees,
and title insurance costs and premiums; (c) any Agent for reasonable out-
of-pocket expenses incurred in connection with the preparation, documentation,
administration and syndication of the Loans or any of the Loan Documents
(including, without limitation, the advertising, marketing, printing, publicity,
duplicating, mailing and similar expenses) of the Loans and Letter of Credit
Liabilities; (d) Agent for paying all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any governmental or revenue
authority in respect of this Agreement, any Letter of Credit or any other Loan
Document or any other document referred to herein or therein; (e) any Agent for
paying all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any Lien
contemplated by this Agreement, any Security Document or any document referred
to herein or therein, and (f) following the occurrence and during the
continuation of an Event of Default, any Lender or any Agent for paying all
amounts reasonably expended, advanced or incurred by such Lender or such Agent
to satisfy any obligation of any Obligor under this Agreement or any other Loan
Document, to protect the Collateral, to collect the Obligations or to enforce,
protect, preserve or defend the rights of the Lenders or Agents under this
Agreement or any other Loan Document, including, without limitation, fees and
expenses incurred in connection with such Lender's or such Agent's participation
as a member of a creditor's committee in a case commenced under the Bankruptcy
Code or the Insolvency Xxx 0000 (England and Wales) or other similar law, fees
and expenses incurred in connection with lifting the automatic stay prescribed
in ss. 362 of the Bankruptcy Code or the
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Insolvency Act 1986 (England and Wales) and fees and expenses incurred in
connection with any action pursuant to ss. 1129 of the Bankruptcy Code or the
Insolvency Act 1986 (England and Wales) and all other reasonable and customary
out-of-pocket expenses incurred by such Lender or such Agent in connection with
such matters, together with interest thereon at the Past Due Rate applicable to
U.S. Loans on each such amount from the due date until the date of reimbursement
to such Lender or such Agent.
11.4 Indemnification. Borrowers, jointly and severally, shall indemnify
each Agent, each Lender and each affiliate thereof and their respective
directors, officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims or damages to which any of them
may become subject, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE OF ANY INDEMNIFIED PARTIES, insofar as such losses, liabilities,
claims or damages arise out of or result from any (i) actual or proposed use by
any Borrower of the proceeds of any extension of credit (whether a Loan, a
Bankers' Acceptance or a Letter of Credit) by any Lender hereunder; (ii) breach
by any Obligor of this Agreement or any other Loan Document; (iii) violation by
any Obligor of any Legal Requirement, or (iv) investigation, litigation or other
proceeding relating to any of the foregoing, and Borrowers, jointly and
severally, shall reimburse each Agent, each Lender, and each Affiliate thereof
and their respective directors, officers, employees and agents, upon demand for
any reasonable and customary expenses (including reasonable and customary legal
fees) incurred in connection with any such investigation or proceeding;
provided, however, that none of the Borrowers shall have any obligations
pursuant to this Section with respect to any losses, liabilities, claims,
damages or expenses incurred by the Person seeking indemnification by reason of
the gross negligence or willful misconduct of that Person or with respect to any
disputes between or among any of Agents, Lenders and Issuers. Nothing in this
Section is intended to limit the obligations of any Borrower under any other
provision of this Agreement. Each Agent and each Lender, respectively, shall
indemnify Borrowers and hold Borrowers harmless from and against the gross
negligence or willful misconduct of such Agent or such Lender, as the case may
be. Nothing in this Section shall render Canadian Borrower or U.K. Borrower
liable in respect of the U.S. Obligations. In the case of any indemnification
hereunder, the applicable Agent or the respective Lender, as appropriate, shall
give written notice to the applicable Borrower of any such claim or demand being
made against an indemnified person and the applicable Borrower shall have the
non-exclusive right to join in the defense against any such claim or demand,
provided that if such Borrower provides a defense, the indemnified person shall
bear its own cost of defense unless there is a conflict of interests between
such Borrower and such indemnified person. No indemnified person may settle any
claim to be indemnified without the consent of the applicable Borrower, such
consent not to be unreasonably withheld or delayed.
11.5 Amendments, Etc. No amendment or modification of this Agreement,
the Notes or any other Loan Document shall in any event be effective against any
Borrower or any other Obligor party thereto unless the same shall be agreed or
consented to in writing by such Person. No amendment, modification or waiver of
any provision of this Agreement, the Notes or any other Loan Document, nor any
consent to any departure by any Obligor therefrom, shall in any event be
effective against the Lenders unless the same shall be agreed or consented to in
writing by the Majority Lenders, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment, modification, waiver or consent shall,
unless in writing and signed by each Lender affected thereby, do any of the
following: (a) increase any U.S. Commitments, Canadian Commitments or U.K.
Commitments of any of the Lenders (or reinstate any termination or reduction of
the U.S. Commitments, Canadian
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Commitments or U.K. Commitments), or subject any of the Lenders to any
additional obligations; (b) reduce the principal of, or interest on, any Loan,
Reimbursement Obligation, fee or other amount due hereunder or amend Section
3.2(b)(2) hereof; (c) postpone or extend the Revolving Loan Maturity Date, the
Term Loan Maturity Date, the Termination Date, the Availability Period or any
scheduled date fixed for any payment of principal of, or interest on, any Loan,
Reimbursement Obligation, fee or other sum to be paid hereunder or waive any
Event of Default described in Section 9.1(a) hereof; (d) change the percentage
of any of the U.S. Commitments, Canadian Commitments or U.K. Commitments, as the
case may be, or of the aggregate unpaid principal amount of Obligations, or the
percentage of Lenders, which shall be required for the Lenders or any of them to
take any action under this Agreement; (e) change any provision contained in
Sections 2.2(c), 7.9, 11.3 or 11.4 hereof or this Section 11.5; (f) release any
Person from liability under a Guaranty or release all or substantially all of
the security for the Obligations or release Collateral (exclusive of Collateral
with respect to which any Agent is obligated to provide a release pursuant to
this Agreement or any of the other Loan Documents or by law) in any one (1)
calendar year ascribed an aggregate value on the most recent financial
statements of the applicable Borrower delivered to Agents in excess of
$1,000,000; (g) increase any of the fixed percentages to be multiplied by the
aggregate amounts of the components comprising the U.S. Borrowing Base, the
Canadian Borrowing Base or U.K. Borrowing Base that are described in (i) and
(ii) of the definition of the U.S. Borrowing Base, the Canadian Borrowing Base
or U.K. Borrowing Base herein, and (h) modify the provisions of Sections 4.1(b)
or 4.2 hereof regarding pro rata application of amounts after an Event of
Default shall have occurred and be continuing. Notwithstanding anything in this
Section 11.5 to the contrary, no amendment, modification, waiver or consent
shall be made with respect to Section 10 without the consent of U.S. Agent to
the extent it affects U.S. Agent, as U.S. Agent or Canadian Agent to the extent
it affects Canadian Agent, as Canadian Agent or U.K. Agent to the extent it
affects U.K. Agent, as U.K. Agent.
11.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
Borrowers, Agents and the Lenders and their respective successors and assigns;
provided, however, that, except as permitted by Section 8.4 hereof, no Borrower
may assign or transfer any of its rights or obligations hereunder without the
prior written consent of all of the Lenders, and any such assignment or transfer
without such consent shall be null and void. Each Lender may sell participations
to any Person in all or part of any Loan or Bankers' Acceptance, or all or part
of its Notes, U.S. Commitments, Canadian Commitments or U.K. Commitments, as the
case may be, or interests in Letters of Credit or Bankers' Acceptances, in which
event, without limiting the foregoing, the provisions of the Loan Documents
shall inure to the benefit of each purchaser of a participation; provided,
however, the pro rata treatment of payments, as described in Section 4.2 hereof
and rights to compensation under Section 3.3 hereof, shall be determined as if
such Lender had not sold such participation. No Lender that sells one or more
participations to any Person shall be relieved by virtue of such participation
from any of its obligations to Borrowers under this Agreement. In the event any
Lender shall sell any participation, such Lender shall retain the sole right and
responsibility to enforce the obligations of Borrowers hereunder, including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement other than amendments, modifications or
waivers with respect to (i) any fees payable hereunder to the Lenders, (ii) the
amount of principal or the rate of interest payable on, or the dates fixed for
the scheduled repayment of principal of, any of the Obligations and (iii) the
release of the Liens on all or substantially all of the Collateral.
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(b) Each U.S. Lender may assign to one or more U.S. Lenders or any
other Person all or a portion of its interests, rights and obligations under
this Agreement; provided, however, that (i) the aggregate amount of the U.S.
Commitments and Term Loans of the assigning U.S. Lender subject to each such
assignment shall in no event be less than $5,000,000 and (ii) other than in the
case of an assignment to another U.S. Lender (that is, at the time of the
assignment, a party hereto) or to a Lender Affiliate of such U.S. Lender or to a
Federal Reserve Bank, Agents and, so long as no Event of Default shall have
occurred and be continuing, U.S. Borrower must each give its prior written
consent, which consents shall not be unreasonably withheld. Each Canadian Lender
may assign to one or more Canadian Lenders or any other Person all or a portion
of its interests, rights and obligations under this Agreement; provided,
however, that (i) the aggregate amount of the Canadian Commitments of the
assigning Canadian Lender subject to each such assignment shall in no event be
less than $5,000,000 and (ii) other than in the case of an assignment to another
Canadian Lender (that is, at the time of the assignment, a party hereto) or to a
Lender Affiliate of such Canadian Lender, Agents and, so long as no Event of
Default shall have occurred and be continuing, Canadian Borrower must each give
its prior written consent, which consents shall not be unreasonably withheld.
Each U.K. Lender may assign to one or more U.K. Lenders or any other Person all
or a portion of its interests, rights and obligations under this Agreement;
provided, however, that (i) the aggregate amount of the U.K. Commitments of the
assigning U.K. Lender subject to each such assignment shall in no event be less
than $5,000,000 and (ii) other than in the case of an assignment to another U.K.
Lender (that is, at the time of the assignment, a party hereto) or to a Lender
Affiliate of such U.K. Lender, Agents and, so long as no Event of Default shall
have occurred and be continuing, U.K. Borrower must each give its prior written
consent, which consents shall not be unreasonably withheld. After giving effect
to any assignment (other than an assignment of all of the commitments and Loans
of the assigning Lender), the assigning Lender shall have commitments and Loans
aggregating at least $5,000,000 unless otherwise agreed to by the U.S. Borrower
and the U.S. Agent. As a condition precedent to any such assignment, the parties
to each such assignment shall execute and deliver to the applicable Agent, for
its acceptance an Assignment and Acceptance in substantially the form of Exhibit
E hereto (each an "Assignment and Acceptance") with blanks appropriately
completed, together with any Note or Notes subject to such assignment and a
processing and recording fee of $3,000 paid by the assignee (for which Borrowers
will have no liability). Upon such execution, delivery and acceptance, from and
after the effective date specified in each Assignment and Acceptance, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (B) the Lender thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto except in respect of provisions of this
Agreement which survive payment of the Obligations and termination of the U.S.
Commitments, Canadian Commitments or U.K. Commitments, as the case may be).
Notwithstanding anything contained in this Agreement to the contrary, any Lender
may at any time assign all or any portion of its rights under this Agreement and
the other Loan Documents as collateral to a Federal Reserve Bank; provided that
no such assignment shall release such Lender from any of its obligations
hereunder.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
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assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant thereto; (ii) such Lender assignor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or any Obligor or the performance or
observance by any Borrower or any Obligor of any of its obligations under this
Agreement or any of the other Loan Documents to which it is a party or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements most recently delivered under either Section 6.2 or Section
7.2 hereof and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon any
Agent, such Lender assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents; (v) such assignee appoints and authorizes U.S. Agent,
Canadian Agent or U.K. Agent, as the case may be, to take such action as agent
on its behalf and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to such Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all obligations that by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender.
(d) The entries in the records of each applicable Agent as to each
Assignment and Acceptance delivered to it and the names and addresses of the
Lenders and the U.S. Commitments, Canadian Commitments or U.K. Commitments of,
and principal amount of the Obligations owing to, each Lender from time to time
shall be conclusive, in the absence of manifest error, and Obligors, Agents and
the Lenders may treat each Person the name of which is recorded in the books and
records of the applicable Agent as a Lender hereunder for all purposes of this
Agreement and the other Loan Documents.
(e) Upon the applicable Agent's receipt of an Assignment and Acceptance
executed by an assigning Lender and the assignee thereunder, together with any
Note or Notes subject to such assignment and the written consent to such
assignment (to the extent consent is required), such Agent shall, if such
Assignment and Acceptance has been completed with blanks appropriately filled,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in its records and (iii) give prompt notice thereof to the applicable
Borrower. Within five Business Days after receipt of notice, the applicable
Borrower, at its own expense, shall execute and deliver to the applicable Agent
new Notes payable to the order of such assignee in the appropriate amounts and,
if the assigning Lender has retained U.S. Commitments, Canadian Commitments or
U.K. Commitments, as the case may be, or Term Loans hereunder, new Notes to the
order of the assigning Lender in the appropriate amounts. Such new Notes shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in the forms required hereunder. Thereafter, the replaced Notes
shall be surrendered to the applicable Agent by the applicable Lender or
Lenders, marked renewed and substituted and the originals thereof delivered to
the applicable Borrower (with copies to be retained by the applicable Agent).
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(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 11.6, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to any Borrower furnished to such Lender by or on behalf of
any Borrower; provided such Person agrees to maintain the confidentiality of
such information in accordance with Section 11.19.
11.7 Limitation of Interest. U.S. Borrower, U.K. Borrower, U.S. Lenders
and U.K. Lenders intend to strictly comply with all applicable usury laws of the
United States and Texas (or the usury laws of any jurisdiction, including
Canada, whose usury laws are deemed to apply to the Notes or any other Loan
Documents despite the intention and desire of the parties to apply the usury
laws of the State of Texas). Canadian Borrower and the Canadian Lenders intend
to strictly comply with all applicable usury laws in effect in Canada (or the
usury laws of any jurisdiction, including the State of Texas, whose usury laws
are deemed to apply to the Notes or any other Loan Documents despite the
intention and desire of the parties to apply the usury laws in effect in
Canada). Accordingly, the provisions of this Section 11.7 shall govern and
control over every other provision of this Agreement or any other Loan Document
which conflicts or is inconsistent with this Section, even if such provision
declares that it controls. As used in this Section, the term "interest" includes
the aggregate of all charges, fees, benefits or other compensation which
constitute interest under applicable law, provided that, to the maximum extent
permitted by applicable law, (a) any non-principal payment shall be
characterized as an expense or as compensation for something other than the use,
forbearance or detention of money and not as interest and (b) all interest at
any time contracted for, reserved, charged or received shall be amortized,
prorated, allocated and spread during the full term of the Obligations. In no
event shall Borrowers or any other Person be obligated to pay, or any Agent, any
Issuer or any Lender have any right or privilege to reserve, receive or retain,
(a) any interest in excess of the maximum amount of nonusurious interest
permitted under applicable laws or (b) total interest in excess of the amount
which such Person could lawfully have contracted for, reserved, received,
retained or charged had the interest been calculated for the full term of the
Obligations at the Ceiling Rate. None of the terms and provisions contained in
this Agreement or in any other Loan Document (including, without limitation,
Section 9.1 hereof) which directly or indirectly relate to interest shall ever
be construed without reference to this Section 11.7, or be construed to create a
contract to pay for the use, forbearance or detention of money at an interest
rate in excess of the Ceiling Rate. If the term of any Obligation is shortened
by reason of acceleration of maturity as a result of any Default or by any other
cause, or by reason of any required or permitted prepayment, and if for that (or
any other) reason any Agent, any Issuer or any Lender at any time, including but
not limited to, the stated maturity, is owed or receives (and/or has received)
interest in excess of interest calculated at the Ceiling Rate, then and in any
such event all of any such excess interest shall be canceled automatically as of
the date of such acceleration, prepayment or other event which produces the
excess, and, if such excess interest has been paid to such Person, it shall be
credited pro tanto against the then-outstanding principal balance of the
applicable Borrower's obligations to such Person, effective as of the date or
dates when the event occurs which causes it to be excess interest, until such
excess is exhausted or all of such principal has been fully paid and satisfied,
whichever occurs first, and any remaining balance of such excess shall be
promptly refunded to its payor.
11.8 Survival. The obligations of Borrowers under Sections 2.2(c),
2.2(d), 7.9, 11.3 and 11.4 hereof and all other obligations of Borrowers in any
other Loan Document (to the extent stated therein), the obligations of each
Issuer under the last sentence of Section 2.2(b)(iii) and the obligations of the
Lenders under Sections 4.1(d), 10.6, 11.7, 11.13, 11.18 and 11.19 hereof, shall,
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notwithstanding anything herein to the contrary, survive the repayment of the
Loans and Reimbursement Obligations and the termination of the U.S. Commitments,
the Canadian Commitments, the U.K. Commitments and the Letters of Credit.
11.9 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.11 Governing Law. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED)
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM
TIME TO TIME IN EFFECT; PROVIDED, HOWEVER, THAT, EXCEPT AS MAY BE REQUIRED UNDER
APPLICABLE LAWS, THE USURY LAWS OF THE STATE OF TEXAS OR THE UNITED STATES OF
AMERICA SHALL NOT APPLY TO LOANS MADE TO AND BANKERS ACCEPTANCES ACCEPTED IN
CANADA BY CANADIAN LENDERS DRAWN BY CANADIAN BORROWER, BUT RATHER THE USURY LAWS
IN EFFECT IN CANADA SHALL GOVERN IN SUCH CONTEXT.
11.12 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of any Loan Document shall be invalid, illegal
or unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions of such Loan Document shall not
be affected or impaired thereby.
11.13 Tax Forms; Net Payments.
(a) Each U.S. Lender which is organized under the laws of a
jurisdiction outside the United States shall, on the day of the initial
borrowing from each such U.S. Lender hereunder and from time to time thereafter
if requested by U.S. Borrower or U.S. Agent, provide U.S. Agent and U.S.
Borrower with the forms prescribed by the Internal Revenue Service of the United
States certifying as to such U.S. Lender's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to such U.S. Lender hereunder or other documents satisfactory to such
U.S. Lender, U.S. Borrower and U.S. Agent indicating that all payments to be
made to such U.S. Lender hereunder are not subject to United States withholding
tax or are subject to such tax at a rate reduced by an applicable tax treaty.
Unless U.S. Borrower and U.S. Agent shall have received such forms or such
documents indicating that payments to such U.S. Lender hereunder are not subject
to United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, U.S. Borrower and U.S. Agent shall be entitled to
withhold taxes from such payments at the applicable statutory rate.
(b) Each Canadian Lender is a resident of Canada for purposes of the
Income Tax Act (Canada).
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(c) Each U.K. Lender is a Qualifying Lender. In this Section 11.13(c),
"Qualifying Lender" means (a) a Lender which is within the charge to U.K.
corporation tax in respect of, and beneficially entitled to, a payment of
interest on a loan made by a person that was a bank for the purposes of section
349 of the Income and Corporation Taxes Act 1988 (as currently defined in
section 840A of the Income and Corporation Taxes Act) at the time the loan was
made, or (b) a Lender which is, on the date a payment of interest falls due
hereunder, resident (as defined in the appropriate double taxation agreement) in
a country with which the U.K. has a double taxation agreement giving residents
of that country exemption from U.K. taxation on interest and does not carry on a
business in the U.K. through a permanent establishment with which the payment is
effectively connected.
(d) Each U.K. Lender shall (i) promptly after the date hereof or
promptly after the date of an Assignment and Acceptance pursuant to which it
became a Lender and (ii) from time to time thereafter upon the obsolescence or
expiration of any previously delivered form or certificate (but only so long as
such Lender remains lawfully able to do so) provide the Borrowers and the Agents
with any form or certificate that is required by any taxing authority, or other
such forms as shall be appropriate to establish, that such Lender is (y) exempt
from Home Jurisdiction Withholding Taxes on payments pursuant to this Agreement
or any other Loan Document. Each U.K. Lender represents and warrants that such
information is true and complete in all material respects as of the date it is
delivered. Each such Lender shall promptly notify the Borrowers and the Agents
if, because of any change in the jurisdiction of organization or the principle
office of such Lender, (A) it is required to withdraw or cancel any form or
certificate previously submitted by it or any form or certificate has otherwise
become ineffective or inaccurate or (B) payments to it are or will be subject to
withholding of any Home Jurisdiction Withholding Tax to a greater or lesser
extent than the extent to which payments to it pursuant to this Agreement, the
Notes or any other Loan Document were previously subject.
(e) If a Lender shall receive a refund of any Taxes paid by a Borrower
pursuant to this Agreement by reason of the fact that such Taxes were not
correctly or legally asserted, such Lender shall within 90 days after receipt of
such refund pay to such Borrower the amount of such refund along with any
interest actually received by such Lender thereon, if any; provided, however,
that such payments shall be required only to the extent any Lender can
determine, in its good faith judgment, that such refunds are attributable to
payments made by or on behalf of such Borrower; and provided, further, that no
Lender shall have any obligation under this Agreement to claim or otherwise seek
to obtain any such refund, but agrees to use reasonable efforts to assist a
Borrower in doing so.
11.14 Interest Act (Canada). Whenever interest is calculated on the
basis of a year of 360 or 365 days, for the purposes of the Interest Act
(Canada), the yearly rate of interest which is equivalent to the rate payable
hereunder is the rate payable multiplied by the actual number of days in the
year and divided by 360 or 365, as the case may be. All interest will be
calculated using the nominal rate method and not the effective rate method and
the deemed reinvestment principle shall not apply to such calculations.
11.15 Judgment Currency. The obligation of each Borrower to make
payments on any Obligation to the Lenders or to any Agent hereunder in any
currency (the "first currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
other currency (the "second currency") except to the extent to which such tender
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or recovery shall result in the effective receipt by the applicable Lender or
the applicable Agent of the full amount of the first currency payable, and
accordingly the primary obligation of each Borrower shall be enforceable as an
alternative or additional cause of action for the purpose of recovery in the
second currency of the amount (if any) by which such effective receipt shall
fall short of the full amount of the first currency payable and shall not be
affected by a judgment being obtained for any other sum due hereunder.
11.16 Conflicts Between This Agreement and the Other Loan Documents. In
the event of any conflict between the terms of this Agreement and the terms of
any of the other Loan Documents, the terms of this Agreement shall control.
11.17 Limitation on Charges; Substitute Lenders; Non-Discrimination.
Anything in Sections 2.2(d), 3.3(c) or 7.9 notwithstanding:
(1) No Borrower shall be required to pay to any Lender
reimbursement or indemnification with regard to any costs or expenses
described in such Sections, unless such Lender notifies the applicable
Borrower of such costs or expenses within 90 days after the date paid
or incurred;
(2) none of the Lenders shall be permitted to pass through to
any Borrower charges and costs under such Sections on a discriminatory
basis (i.e., which are not also passed through by such Lender to other
customers of such Lender similarly situated where such customer is
subject to documents providing for such pass through); and
(3) if any Lender elects to pass through to any Borrower any
material charge or cost under such Sections or elects to terminate the
availability of LIBOR Borrowings for any material period of time, the
applicable Borrower may, within 60 days after the date of such event
and so long as no Default shall have occurred and be continuing, elect
to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination such Borrower shall (i) if Agents
and each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender
through such date of termination or (ii) have arranged for another
financial institution approved by Agents (such approval not to be
unreasonably withheld or delayed) as of such date, to become a
substitute Lender for all purposes under this Agreement in the manner
provided in Section 11.6; provided further that, prior to substitution
for any Lender, the applicable Borrower shall have given written notice
to Agents of such intention and the Lenders shall have the option, but
no obligation, for a period of 60 days after receipt of such notice, to
increase their U.S. Commitments, Canadian Commitments or U.K.
Commitments, as the case may be, in order to replace the affected
Lender in lieu of such substitution.
11.18 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
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IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
11.19 Confidentiality. Each of the Agents, Chase, RBC, Chase U.K. and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any actual or
prospective assignee of or participant in any of its rights or obligations under
this Agreement so long as such assignee or participant agrees to be bound by
confidentiality provisions substantially similar to this Section or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to any Borrower (or any Subsidiary of a Borrower) so long
as such counterparty (and, if applicable, its advisors) agrees to be bound by
confidentiality provisions substantially similar to this Section, (g) with the
consent of the applicable Borrower or (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to any Agent, Chase, RBC, Chase U.K. or any Lender on a
nonconfidential basis from a source other than a Borrower or a Subsidiary of a
Borrower. For the purposes of this Section, "Information" means all information
received from a Borrower (or any Subsidiary of a Borrower) relating to such
Borrower (or such Subsidiary) or its business, other than any such information
that is available to any Agent, Chase, RBC, Chase U.K. or any Lender on a
nonconfidential basis prior to such disclosure; provided that, in the case of
information received after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
11.20 Amendment and Restatement. This Agreement amends and restates in
entirety that certain Loan Agreement dated November 20, 1998 executed by and
among National Tank Company, a Delaware corporation, Canadian Borrower, The
Chase Manhattan Bank, as U.S. Agent, The Bank of Nova Scotia, as Canadian Agent
and certain lenders therein named, as the same may have been amended.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
NATCO GROUP INC,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxx
------------------------------------
J. Xxxxxxx Xxxxx, Senior
Vice President and Chief
Financial Officer
NATCO CANADA, LTD., a corporation
formed under the laws of the
Province of Ontario
By: /s/ Xxxxxxx Xxxxx
------------------------------------
J. Xxxxxxx Xxxxx, Vice President
AXSIA GROUP LIMITED,
a company incorporated in England and
Wales under the Companies Act of
the United Kingdom
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: J. Xxxxxxx Xxxxx
----------------------------------
Title: Director
---------------------------------
Address for Notices:
Brookhollow Central III
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxx
Telecopy No.: (000) 000-0000
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98
THE CHASE MANHATTAN BANK, as U.S. Agent,
Issuer of U.S. Letters of Credit and
a U.S. Lender
By: /s/ Xxxx X. Xxxx
------------------------------------
Xxxx X. Xxxx, Senior Vice President
Address for Notices:
U.S. Commitment: 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
$10,294,117.65 Attention: Manager, Structured
Finance - Oil Service
Telecopy No.: (000) 000-0000
with a copy to:
Canadian Commitment:
Xx. Xxxxxxx Xxxxxxx
$0 The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
U.K. Commitment:
$0
Term Loans:
$14,705,882.35
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XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION, as
Documentation Agent and a U.S.
Lender
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
----------------------------------
Title: Relationship Manager
---------------------------------
Address for Notices:
U.S. Commitment: 0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
$8,235,294.12 Attention: Xx. Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$11,764,705.88
94
000
XXXX XXX, XX (XXXX XXXXXX XXXXXXX,
XXXXXXXX), as Syndications Agent and
a U.S. Lender
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------
Title: First Vice President
---------------------------------
Address for Notices:
U.S. Commitment: 000 Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
$8,235,294.12 Attention: Xx. Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$11,764,705.88
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101
CHASE MANHATTAN INTERNATIONAL
LIMITED, as U.K. Agent
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
-----------------------------------
Title: Vice President
----------------------------------
Address for Notices:
U.S. Commitment: Trinity Tower
9 Xxxxxx Xxxx Street
$0 London, England, UK X0X 0XX
Attention: Loans Agency
Telecopy No.: 00 44 207 777 2360
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$0
96
000
XXXXX XXXX XX XXXXXX, as
Canadian Agent, Issuer of
Canadian Letters of Credit
and a Canadian Lender
By: /s/ X.X. Xxxxxxxx
------------------------------------
Name: X.X. Xxxxxxxx
----------------------------------
Title: Senior Manager
---------------------------------
Address for Notices:
U.S. Commitment: 000 Xxxxxx Xxxxxx XX
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
$0 Attention: Xx. Xxxxx Xxxxxxxxx
Telecopy No.: 000-000-0000
Canadian Commitment:
$10,000,000
U.K. Commitment:
$0
Term Loans:
$0
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103
THE CHASE MANHATTAN BANK,
as Issuer of U.K. Letters of Credit
and a U.K. Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
U.S. Commitment: 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
$0 Attention: Manager, Structured
Finance -- Oil Service
Telecopy No.: (000) 000-0000
with a copy to:
Canadian Commitment:
Xx. Xxxxxxx Xxxxxxx
$0 The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
U.K. Commitment:
$5,000,000
Term Loans:
$0
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104
ARAB BANKING CORPORATION B.S.C.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
----------------------------------
Title: First Vice President
---------------------------------
Address for Notices:
U.S. Commitment: 000 Xxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
$4,117,647.06 Attention: Xxxxxxx Xxxxxxxxx
Telecopy No.: 212-583-0921
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$5,882,352.94
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[INTENTIONALLY LEFT BLANK]
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106
BANKERS TRUST COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
----------------------------------
Title: Managing Director
---------------------------------
Address for Notices:
U.S. Commitment: 000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
$4,117,647.06 Attention: Xx. Xxxxx Xxxxxx
Telecopy No.: 000-000-0000
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$5,882,352.94
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107
XXXXX, LIDDELL & XXXX LLP 3400 Chase Tower
Attorneys & Counselors 000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
(000) 000-0000
Fax: (000) 000-0000
Direct Dial: (000) 000-0000
e-mail: xxxxx@xxxxxxxxxxx.xxx
Austin o Dallas
Houston o New Orleans
March 22, 2001
DISTRIBUTION
RE: NATCO Group Inc. -- Syndicated Credit Facility
Ladies and Gentlemen:
With this letter, I am forwarding to each applicable lender their ORIGINAL
executed Notes. Also enclosed herewith please find fully executed counterparts
of the following documents relating to this facility:
1. Loan Agreement
2. Intercreditor Agreement
3. Borrowing Base Certificate
4. Canadian Security Agreement executed by NATCO Canada
5. US Security Agreements executed by NATCO Group, National Tank Company,
NATCO London and Total Engineering Services Team
6. US Contribution Agreement, Canadian Contribution Agreement and UK
Contribution Agreement
7. Notice of Entire Agreement
8. US Guaranties executed by National Tank Company, NATCO London and
Total Engineering Services Team
9. Canadian Guaranties executed by NATCO Group, National Tank Company,
NATCO London and Total Engineering Services Team
10. UK Guaranties executed by NATCO Group, National Tank Company, NATCO
London and Total Engineering Services Team
11. US Financing Statements executed by NATCO Group, National Tank
Company, NATCO London and Total Engineering Services Team
12. Organizational and authorization documents for NATCO Canada, NATCO
Group, National Tank Company, NATCO London and Total Engineering
Services Team, Axsia Group Limited, Axsia Limited, Axsia Xxxxx Xxxxx
Limited, Axsia Howmar Limited and Xxxxxxx Xxxxxx Limited
13. Opinion of Borrowers' US counsel and opinions of Borrowers' Canadian
counsel
The UK Security Agreements/Guaranties and the Opinion of Borrowers' UK
counsel will be distributed in a later package.
